Andhra, Karnataka slug it out after Nara Lokesh invites NASSCOM to relocate to Visakhapatnam

Amaravati: Andhra Pradesh and Karnataka are locked in a bitter battle after Andhra IT Minister Nara Lokesh invited NASSCOM members to relocate their business to Visakhapatnam.

This follows the National Association of Software and Service Companies (NASSCOM’s) disappointment over the Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024.

The IT industry body observed that the restrictions mandated by this bill "could force companies to relocate as local skilled talent becomes scarce".

Against this backdrop, Lokesh welcomed NASSCOM to expand or relocate their businesses to Andhra’s IT, IT services, AI, and data center cluster at Vizag.

In a post on X, Nara Lokesh extended an open invitation to NASSCOM members to set up shop in the state, following concerns raised on neighboring Karnataka’s proposal to reserve certain jobs for Kannadigas there.

“We understand your disappointment. We welcome you to expand or relocate your businesses to our IT, IT services, AI, and data center cluster at Vizag,” he said in a post on X.

Promising best-in-class facilities, the IT minister offered "uninterrupted power, infrastructure, and the most suitable skilled talent" with "no restrictions from the government".

Responding to the post by Lokesh, Karnataka IT Minister Priyank Kharge questioned Lokesh if he can ensure that every company invested in Andhra Pradesh employs deserving, trained, and skilled individuals from the state.

In a post greeting him in Telugu, Priyank wrote, "Karnataka has always excelled in most sectors due to our consistent relationships and consultative approach with industry leaders, advisory bodies, and consortiums in drafting policies and schemes. In tune with previous initiatives, this draft bill will include recommendations from our industry partners. Our goal is to develop a global workforce using local talent, while also encouraging global investments and creating employment opportunities."

He mentioned NASSCOM saying the Karnataka government will not do anything that will not withstand legal scrutiny. "This is your Government and as always we are just a call away," he wrote.

What did NASSCOM say?

In a statement, NASSCOM said that globally, there is a huge shortage of skilled talent, and Karnataka despite the large pool, is no exception. Restrictions could force companies to relocate as local skilled talent becomes scarce.

The technology sector has been crucial to Karnataka's economic and social development, with Bengaluru known globally as India's Silicon Valley. The technology sector contributes almost 25% of the state GDP and has played a key role in enabling higher growth for the state, and higher per capita income than the national average. With over a quarter of India's digital talent, the state houses over 30% of the total GCCs and around 11000 start-ups.

"It is deeply disturbing to see this kind of bill which will not only hamper the growth of the industry, impact jobs and the global brand for the state. NASSCOM members are seriously concerned about the provisions of this bill and urge the state government to withdraw the bill. The bill's provisions threaten to reverse this progress, drive away companies, and stifle startups, especially when more global firms (GCCs) are looking to invest in the state," it stated.