A proposal by Silectric Semiconductor Manufacturing Pvt Ltd, supported by Zoho, to invest Rs.3,425.6 crore in the state's first electronics manufacturing cluster close to Mysuru was approved by Karnataka Chief Minister Siddaramaiah.

According to the CM, this initiative represents a major turning point for Karnataka in the semiconductor and electronics manufacturing industry and is anticipated to generate 460 new jobs.

At the 64th State High-Level Clearance Committee (SHLCC) meeting, which Siddaramaiah led, the investment was approved. About 10 applications totaling Rs.9,823 crore from a variety of industrial sectors were approved during the meeting; these are expected to create 5,605 employment in the state.

In Mysuru, the state government has set aside 234 acres of land in Kochanahalli, close to Kadakola, for semiconductor and electronics manufacturing clusters (EMCs). To further spur industry expansion, Karnataka also intends to implement a new Electronics System Design and Manufacturing (ESDM) regulation.

The government has designated 901 acres of land in four industrial clusters, in addition to the Kochanahalli cluster, to boost the semiconductor industry. These comprise 213.14 acres in Hosahalli, Bengaluru Rural; 218.20 acres in Vasanthanarasapura Industrial Area in Tumakuru; 245.67 acres in Kochanahalli, Mysuru; and 224.5 acres in Hubballi, close to Belur-Kotur.

State ministers have expressed worry about the difficulties in luring semiconductor companies to Karnataka in spite of these initiatives. While the state has raised Rs.70,000 crore in investments in the semiconductor industry, Karnataka's Minister of IT and Biotechnology, Priyank Kharge, said that "favouritism from the Union government towards Gujarat" has made it challenging to win more projects. He hinted that investments could be redirected to Gujarat, Prime Minister Narendra Modi's home state, with just one phone call from New Delhi.

Similar concerns were expressed by State Minister for Large and Medium Industries MB Patil, who pointed out that corporations only pay 20percent of the costs because the Union government in Gujarat provides 50percent incentives on top of 30percent state incentives. According to Patil, Karnataka might draw more semiconductor investments if it were given comparable incentives. He brought up this matter with HD Kumaraswamy, the Union Minister of Heavy Industries, in an attempt to gain greater backing for Karnataka's aspirations in the semiconductor industry.