Nasscom opposes Karnataka’s local jobs reservations bill, warns firms might relocate

NASSCOM expresses concern over Karnataka's local hiring law, warns of negative impact on tech industry growth and jobs.

The tech industry’s apex lobby group, the National Association of Software and Service Companies (NASSCOM) on July 17 said it was “disappointed” and “deeply concerned” about the possible passage of the Karnataka State Employment of Local Industries Factories Establishment Act Bill, 2024 — a law, when enacted, would mandate private firms with operations in the State to hire locally for Group C and D category workers.

“It’s 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 start-ups,” said Nasscom.

The tech sector contributes 25% of the State’s GDP, houses a quarter of the country’s digital talent, with more than 11,000 start-ups and 30% of the total Global Capability Centres (GCCs), Nasscom said, warning local employment laws “could force companies to relocate as local skilled talent becomes scarce.”

Nasscom said knowledge-led businesses would locate where talent is, as attracting skilled workers is crucial for their success. Globally, there was a huge shortage of skilled talent and Karnataka, despite the large pool, was no exception, it added.

Nasscom advocated “a dual strategy” to foster the tech sector - frame policies to attract top global talent and invest in building a local talent pool through formal and vocational education.

Nasscom said it is seeking an “urgent meeting for industry representatives with State authorities to discuss the concerns and prevent the State’s progress from being derailed.”