Nasscom urged the government to withdraw the bill and sought an urgent meeting with the state authorities to discuss the concerns. “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. At the same time, the restrictions could force companies to relocate as local skilled talent becomes scarce,” it said in a statement.
Technology industry experts including Biocon founder Kiran Mazumdar Shaw, former Infosys director TV Mohandas Pai and former CFO and Nasscom co-chairman RK Mishra criticised the bill in strong words.
Pai called the bill should be junked as it is “discriminatory, regressive and against the Constitution.” In a post on X, he termed it “a fascist bill as in Animal Farm, unbelievable that the @INCIndia can come up with a bill like this – a govt officer will sit on recruitment committees of the private sector? People have to take a language test?”
Shaw also took to X to say, “As a tech hub we need skilled talent and whilst the aim is to provide jobs for locals, we must not affect our leading position in technology by this move. There must be caveats that exempt highly skilled recruitment from this policy.”
Mishra, also the cofounder of successful startup Yulu Bikes, said the move was “short-sighted” and it “will scare Indian IT & GCCs”.
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Calling it a bad precedent, Shriram Subramanium, founder of proxy shareholder advisory firm InGovern, said industry and companies will push back against this bill. According to him, Karnataka doesn’t have so much talent and the “societal impact in the psychology of citizens (both Karnataka domicile and outside Karnataka) will be huge”.Subramanium went on to say, “Who will do even unskilled work? Security staff, Restaurant staff, Housekeeping jobs, Carpentry jobs, Mason jobs. Only people from outside Karnataka are good for these. Visit villages & small towns in Karnataka to see the aversion to doing such jobs.”
“Karnataka’s ambition to replace Maharashtra as the biggest GDP contributing state can’t happen alongside localisation efforts… in a free market, jobs always find skills, and by restricting skilled workers it will get more difficult to attract investments,” Balasubramanian A, senior VP and business head at recruitment and human resource firm TeamLease Services, said.
The move could also lead to newer startups looking for other bases. “The startup ecosystems in Delhi NCR and Mumbai have really improved and though Bengaluru is still top dog when it comes to finding talent and networking with important investors, a move like this could significantly benefit the other two contenders,” an investor said, declining to be identified.
The impact would be across blue-collar and white-collar jobs, with the essential labour supply required in sectors like ecommerce, quick commerce and logistics being disrupted, the investor added. “Over time as our fertility rates fall, this shortage will get worse. If you’re making an outsized contribution to GDP when compared to your population, you need to mobilise labour from other states,” Balasubramanian said.
A large chunk of white-collar management in the city’s top firms also hail from outside the state, something that could lead to these firms needing to shift their operations out of Bengaluru, they said. “Moreover, it could lead to foreign firms like Airbus and Mercedes moving their global capability centres (GCCs) out of the country entirely in case they fear more such disruptions in other cities.”
Bengaluru-based startups like Flipkart, Swiggy and Meesho did not immediately reply to requests for comments on the bill.
AP, Kerala rush to welcome tech cos
Amid the backlash on the bill, Andhra Pradesh’s minister of IT electronics & communications Lokesh Nara welcomed technology firms to expand and relocate to its port city Visakhapatnam, also known as Vizag.
On LinkedIn, Nara responded to Nasscom’s post addressing its members, saying, “Andhra Pradesh is ready to welcome you. Please get in touch!”
“We understand your disappointment. We welcome you to expand or relocate your businesses to our IT, IT services, AI and data centre cluster at Vizag,” Nara said.
He further added, “We will offer you best-in-class facilities, uninterrupted power, infrastructure and the most suitable skilled talent for your IT enterprise with no restrictions from the Government.”
Kerala Industries & Law Minister P Rajeeve urged companies to invest in Kerala. “Employee talent and merit are the only criteria for recruitment. It is the right time for companies to discover Kerala, with its highly skilled talent pool, the best climate, and a hassle-free environment. Embrace this opportunity,” he posted on X (formerlyTwitter).
