Hubli-Dharwad on the way to surpass Karnataka’s Silicon Valley

Blessed with thousands of small and medium scale industries and educational institutes, Hubli-Dharwad is the fastest growing commercial and IT market in Karnataka. The strategic location of the region and pro industries, infrastructure enabled core of investment funds pouring into the twin city.

Infrastructural development and political willingness are the key factors for development of any region. The twin cities of Hubli and Dharwad, collectively referred as "Hubli-Dharwad", are the classy example of it. The market potentials in the twin cities have attracted the industries in the region, making it one of the fasted developing cities in South India. Hubli-Dharwad is one of the fast emerging IT markets and a major commercial hub in North Karnataka. The twin cities offer lots of business prospects to IT vendors and channel partners.

The strategic location of Hubli-Dharwad gives the region an advantage to tap business opportunities faster. Hubli-Dharwad is located 425 km northwest of Bengaluru, on the Golden Quadrilateral Super highways, National Highway 4. While Dharwad is the administrative headquarters, Hubli, situated about 20 km southeast of Dharwad. It also lies on National Highway 63 and National Highway 218. All These highways connect Hubli with major cities like Bengaluru, Chennai, Mangalore, Hyderabad, Pune, Mumbai, Panaji, Ahmedabad, Jodhpur etc. The city is governed by the Hubli-Dharwad Municipal Corporation, having an elected council. The twin-city corporation occupies a unique place in Karnataka State. It is also an important city for the Indian Railways, as it is the headquarters for South Western Railway Zone and the Hubli Railway Division. Hubli is a major railway junction in North Karnataka.

Hubli is a commercial and industrial center with various commercial establishments whereas Dharwad is an educational and administrative center with numerous colleges, universities and government offices. The Hubli-Dharwad region is the hub of small and medium industries. Many industrialists from metropolitan cities like Mumbai have set up their units in Hubli-Dharwad. There are machine tools industries, electrical, steel furniture, food products, Pharma, rubber and leather industries and tanning industries. Hubli is a prosperous handloom weaving center and has a textile unit.

Hubli- Dharwad is blessed with pre-university, engineering colleges as well as universities. The twin cities have 4 Universities and 2 deemed Universities and 200+ colleges providing quality education for students across North Karnataka. Due to such a large cluster of learning centers, the twin cities are called the educational hub of North Karnataka. There are many engineering colleges present in the city. B.V Bhoomaraddi College of Engineering, KLE Institute of Technology, SDM College of Engineering and Technology are the major engineering colleges. Hubli-Dharwad, generates over 10,000 engineering and medical graduates every year from renowned colleges in this region.

Hubli-Dharwad is a major IT distribution hub in the North Karnataka region. Around 60% distribution business undertakes in the region. Many IT hardware manufacturing and software development sectors in North Karnataka are located in Hubli-Dharwad. Hubli-Dharwad and the surrounding region have over 50 engineering colleges that produce a significant number of options. The Government of India has set up a Software Technology park on Pune-Bengaluru Road or NH-4. The Government of Karnataka has set up Aryabhatta Tech Park in Navanagar region of Hubli, which is occupied by 7 IT and IT-services related companies. Dharwar District Association for Information Technology- Hubli (DDAIT) is the prominent IT association that is instrumental in solving the problems faced by the channel.

The Hubli - Dharwad region provides ample business opportunities for channel partners. Being a major distribution point in North Karnataka, channel partners enjoy lots of business prospects. However, e-commerce has adversely impacted the business of traditional channel partners. Hubli-Dharwad IT partners demand regulation of OLS and level playing field for both online and offline partners.

“We demand a level playing field for both online and offline partners. Predatory pricing by e-commerce portals is not only hampering our profit margins also it is against the competition act", says Manish Jain, owner of Riddhi Siddhi Computers.

VAT is another major challenge faced by the channel in the region. The Karnataka government has fixed VAT at 5.5% for IT products, whereas neighboring states have 4%– 5%, which makes the partners, especially in the borders of Tamil Nadu, Andhra Pradesh and Maharashtra to lose business. Partners are optimistic about General Sales Tax (GST) that will eliminate such disparities in taxation and benefit the industry at large.

Despite of OLS factor and taxation, Hubli-Dharwad IT partners are optimistic about future growth in the industry. The infrastructure development and government projects will further escalate the growth of the twin cities.

Interview-1

Malatesh Kulkarni of Unicom Services

What are the market potentials in Hubli-Dharwad region?

Hubli-Dharwad is one of the fasted growing IT market in North Karnataka region. The twin cities are major IT distributors in north Karnataka and nearly 60% of distribution is carried from here. Many big corporate houses and small and medium scale industries have set up their offices in the region. Hubli-Dharwad has emerged as a commercial hub, giving employment opportunities to lacks of people.

How do you analyze IT growth in the region?

With many big IT giants coming in Hubli-Dharwad, the twin city is an emerging IT hub after Bangluru. However, to my opinion, the IT growth in the region is not up to the mark. Despite of having two IT parks and renowned engineering colleges, the development on the IT part is still slow. There is need of more efforts on part of the state government to develop industry.

From Channel perspective, what are the key challenges faced by the partners?

The online sale has largely affected the channel business. Similarly, taxation is a major issue that partners face. Being at the border, partners face a lot of disparity in taxation in other states like Maharashtra and Goa. We are closely monitoring government’s taxation policy. We think that with implementation of GST, taxation will become less tedious and easy.

Interview-2

Mitesh Jain of RT Computers

What are the prominent brands that dominate Hubli-Dharwad IT market?

No such brands enjoy dominance in Hubli-Dharwad. Customers and partners have their choices and preferences regarding brands. In printers, HP and Canon enjoys good market share, whereas in networking D Link, TP Link and Digisol are prominently traded. In laptops, Lenovo and Acer are prominent in the market.

What are the key verticals in Hubli-Dharwad region?

Being a commercial and educational hub, small and medium scale industries and education are key verticals. Apart from that banking, government and media are the other prominent verticals.