The Karnataka Industrial Policy 2025-30 emphasises sustainability, regional balance, and innovation. The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) is poised to play a crucial role in shaping the future of MSMEs in the state.
The premier industry association aligns its efforts with Karnataka’s ambitious industrial and economic goals. Furthermore, FKCCI is actively collaborating with the state government to ensure that MSMEs fully leverage the policy benefits. In an exclusive interaction with Cybermedia Research, FKCCI President M.G. Balakrishna talks in detail about the growth of MSMEs in Karnataka and the association’s efforts to provide further impetus to the state’s initiatives.
Boosting MSMEs with Policy Implementation
“We are committed to ensuring MSMEs benefit from the Karnataka Industrial Policy 2025-30,” promises Mr Balakrishna. The chamber is focused on policy advocacy, ensuring that concerns such as credit access, ease of doing business and infrastructure support are prioritised in implementation. Additionally, FKCCI is working to drive innovation-led growth through industry-academia collaborations, incubation programmes and funding linkages.
To ensure a balanced industrial ecosystem, the chamber is also pushing for growth in tier-II and tier-III cities through district chambers. “We will track policy impact through key indicators like MSME registration growth, credit flow, export contributions and sustainability adoption rates, presenting periodic reports to the government for course correction,” highlights Mr Balakrishna.
MSME Participation in Large-Scale Projects
With Karnataka securing over ₹10.27 lakh crore in investment commitments at the Global Investors Meet 2025, FKCCI is keen on integrating MSMEs into the supply chains of these large-scale projects. “We are working closely with large industries to create vendor development programmes that will enable MSMEs to become part of their supply ecosystem,” informs Mr Balakrishna.
Additionally, FKCCI is collaborating with the National Skill Development Corporation (NSDC) and other industry bodies to train MSME workers in high-growth sectors like renewable energy, electric vehicles, and AI-driven manufacturing. Dedicated MSME clusters near major industrial projects are also in the pipeline, which would facilitate easier access to contracts and partnerships.
Aiding MSME Job Creation in Non-Metro Regions
Despite MSMEs in Karnataka employing nearly 68.72 lakh people, urban-rural disparities and divide persist in the state’s industrial sector. FKCCI is advocating for decentralised industrial hubs in tier-II and tier-III cities to promote local employment. Mr Balakrishna points out, “We work closely with financial institutions to enhance credit accessibility for rural entrepreneurs and provide market access via e-commerce platforms.”
The chamber is also driving rural skill development programs in traditional industries like handicrafts, khadi, coir and food processing while pushing for Geographical Indication (GI) tags to boost exports. “We assist small-scale industries in obtaining GI tags and facilitating global market access through trade fairs and export handholding,” he adds.
The Need for a Dedicated MSME Policy
FKCCI has long been vocal about the need for a dedicated MSME policy in Karnataka. “Our research indicates that states with dedicated MSME policies see 20-30 per cent higher credit flow to the sector and 15 per cent higher employment generation,” stresses Mr Balakrishna.
Drawing inspiration from Germany’s Mittelstand model, FKCCI is advocating for long-term financing, R&D support and targeted subsidies. The chamber has submitted policy recommendations focused on preferential procurement, tax incentives and simplified compliance norms to further enhance MSME competitiveness.
Driving MSME Digital Transformation
Digital adoption is a key priority, especially with over 2,000 SMEs from all over the state receiving Industry 4.0 training ahead of Invest Karnataka. “We conduct workshops on automation, Artificial Intelligence (AI) and cloud-based solutions in partnership with technology firms,” Mr Balakrishna elaborates. Meanwhile, FKCCI is also working with fintech companies and banks to facilitate digital lending solutions, while urging the government to provide subsidies on smart manufacturing investments.
Regulatory Reforms for Ease of Doing Business
FKCCI has consistently emphasised the need for regulatory simplifications to reduce bureaucratic hurdles for MSMEs. “We are advocating for a single-window clearance system to handle all approvals for MSMEs in a time-bound manner,” divulges Mr Balakrishna.
Other key proposals from the industry body include decriminalising compliance norms, introducing an advisory mechanism instead of punitive penalties, and implementing risk-based self-certification to reduce inspection-related harassment. FKCCI also actively engages with policymakers to streamline GST, labour laws, and environmental clearances.
MSMEs and Karnataka’s $1 Trillion GDP Target
With Karnataka targeting a 15-16 per cent annual growth rate to achieve a $1 trillion GDP by 2030, MSMEs will be integral to this vision. “We are providing extensive export promotion support to help MSMEs scale globally,” says Mr Balakrishna, adding that FKCCI is also developing whitepapers on high-potential sectors like electric vehicles, agritech and aerospace to facilitate MSME participation.
Infrastructure advocacy remains a priority, with FKCCI pushing for better logistics, industrial parks, and common facility centres for MSMEs.
The MSME Conclave 2025: A Catalyst for Growth
As part of its efforts to foster MSME growth, FKCCI is organising the second edition of the MSME Conclave 2025 in Bangalore. “This event will focus on key themes, such as innovation, sustainability, financial inclusion and ease of doing business,” Mr. Balakrishna informs.
With participation from industry leaders, policymakers and international trade experts, the conclave is expected to serve as a crucial platform for knowledge exchange, policy advocacy and business networking, further strengthening Karnataka’s MSME ecosystem.
As Karnataka marches towards its economic and industrial growth targets, industry bodies like FKCCI remain at the forefront, ensuring that MSMEs — often considered the backbone of the state’s economy — are well-positioned to thrive in an evolving business landscape.
