Special Economic Zones and Warehousing Clusters in Bengaluru

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India-Briefing-Special Economic Zones in Bangalore

Bengaluru (formerly Bangalore)– India’s leading information technology (IT) hub, accounts for a maximum share of multi tenanted special economic zones (SEZs) space in India.

The city has an SEZ share of about 38 percent in the total number of SEZs located in Karnataka, with the maximum number of SEZs catering to the IT and IT enabled services (ITES) sector, followed by biotechnology, aerospace, and aviation sectors. 

List of Operational SEZs in Bengaluru

Most of the IT SEZs in the city are strategically located towards the border areas such as Outer Ring Road and Whitefield (East). These two areas account for a respective 71 percent and 16 percent share of the total SEZ stock in Bengaluru.

In the past few years, the Electronic City – an IT nerve centre in the far south, and North Bengaluru – towards the Kempegowda International Airport (located in Devanahalli), have also emerged as important growth corridors for IT parks and SEZs. This is chiefly due to the availability of large land parcels, modern infrastructure, better connectivity, and low land values compared to other saturated parts of Bengaluru.

The state government has also earmarked 1,900 acres of Karnataka Industrial Area Development Board (KIADB) for an aerospace SEZ, a hardware park, and an IT park in Bengaluru. 

Together, these locations offer a wide range of options for foreign businesses looking to invest in the city. However, before examining the locations, investors must consider the benefits and incentives available in an SEZ. 

Federal government incentives 

India’s SEZ Act, 2005 offers several financial incentives to developers and tenants of SEZs.

In addition, foreign direct investment (FDI) equity caps are not applicable to companies operating from SEZs. The companies are exempted from the requirements of industrial licenses and are allowed to retain 100 percent of their foreign exchange earnings in special export earners foreign currency exchange accounts.

SEZ located businesses are also free to sell goods in the domestic tariff area (DTA) on payment of applicable duties.

SEZ incentives in Delhi NCR

It is worth noting for investors that Karnataka offers additional subsidies and incentives under its state SEZ policy, 2009. Therefore, when considering a new investment in any of the SEZs in the state, companies must examine each location individually – various sources and types of support that may be available, depending on the scope of the business.  

SEZs set up by the private sector

There are 30 notified SEZs in Bengaluru; one SEZ dedicated to biotechnology; one to the aerospace industry, and the rest to IT and ITES services. Out of these, 18 are currently operational:

Bagmane Tech Park

Bagmane houses top global companies such as HSBC, Motorola, Hewlett Packard, Oracle, Grant Thornton, Dell, Ogilvy, PWC, Bank Bazaar, and Lenovo. The park offers multiple amenities like transportation service, food court, day-care center, banks, and financial services.

Nearest railway station: Baiyappanahalli goods yard railway station – 4.1 miles (6.6 km)

Distance from Bengaluru city junction (main railway station) – 7.4 miles (11.9 km)

Distance from Bengaluru’s Kempegowda International Airport – 23.3 miles (37.5 km)

International Tech Park Bangalore (ITPL)

A joint venture between Singapore and India, ITPL is a 28 hectares integrated development area with office space, retail mall, hotel, and several other amenities. It is located miles (18 km) from the city centre. Some of the top companies located in the SEZ include General Motors, Xerox, Vodafone, TCS, Sharp, Mu Sigma, and Oracle.

Nearest railway station: Whitefield – 3.3 miles (5.4 km); Hoodi Halt – 4.1 miles (6.7 km)

Distance from Bengaluru city junction (main railway station) – 13.7 miles (22.1 km)

Distance from Bengaluru’s Kempegowda International Airport – 27.4 miles (44.2 km)

Manyata Tech Park

Spread over 300 acres, it is located in Nagawara and is well connected by the outer ring road to areas like Whitefield.

Some of the top companies located at Manyata Tech Park are Target, L&T, Philips, Nokia, Fidelity, Nvidia, AXA, and Cognizant among others.

Nearest railway station: Banaswadi – 3.8 miles (6.2 km); Hebbal – 2.5 miles (4.0 km)

Distance from Bengaluru city junction (main railway station) – 8.4 miles (13.5 km)

Distance from Bengaluru’s Kempegowda International Airport – 17.7 miles (28.5km)

Cessna Business Park

The Cessna Business Park is located in the heart of the outer ring road at Kadubeesanahalli. It is one of the largest, busiest, and the most popular business parks in Bengaluru. It has the likes of companies such as Cisco, LG, iQuanti, Yokogawa, Infiniti Research, Accolite, AT&T, Inmobi and more.

Nearest railway stations: Belandur – 1.2 miles (2.0 km); Karmelaram – 3.1miles (5.0 km)

Distance from Bengaluru city junction (main railway station) – 11.8 miles (19.0 km)

Distance from Bengaluru’s Kempegowda International Airport – 26.5 miles (42.7 km)

RMZ Ecoworld

RMZ Ecoworld is another tech park that is located close to RMZ Ecospace. It is one among the many tech parks situated on the outer ring road. It houses companies such as KPMG, Morgan Stanley, Keystride Labs, Itron India, Infratab Bengaluru, and SAP.

Nearest railway stations: Belandur– 2.5 miles (4.0 km); Karmelaram – 3.1 miles (5.0 km)

Distance from Bengaluru city junction (main railway station) – 11.2 miles (18.1 km)

Distance from Bengaluru’s Kempegowda International Airport –29.3 miles (47.3 km)

Warehousing clusters

In Bengaluru, the majority of the demand for warehousing space comes from the e-commerce sector, followed by IT, third-party logistics, and FMCG firms.

Most of the city’s warehousing activity is concentrated on the Nelamangala-Dabaspete cluster and Hoskote-Narsapura cluster, along its chief peripheral nodes like Tumkur Road (north-west), Old Madras Road (east), Hosur Road (south), and Mysore Road (south-west).

Rent Rate for Major Industrial and Warehousing Clusters in Bengaluru

The Nelamangala-Dabaspete warehousing area is a 30 km belt on Tumkur Road that connects to Mumbai via NH-4. It is located near the Peenya Industrial Area, and services manufacturing units from across the industries, including pharmaceutical, automobile, and food and beverage.

Relatively new, the Hoskote-Narsapura cluster connects to Sriperumbudur, in Chennai, via Old Madras Road on NH-4. It offers easy access to key IT/ITES SEZs located in Outer Ring Road, Whitefield, and Sarjapur Road.

These clusters are situated in the eastern and the northwestern corridors and are home to large occupiers from the e-commerce segment such as Amazon, Flipkart, Myntra, Aditya Birla, Madura garments, and Decathlon. 

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India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Delhi and Mumbai. Readers may write india@dezshira.com for more support on doing business in India.