Known as India's Silicon Valley, Bengaluru is home to Google's national headquarters and those of local tech behemoths Tata Consulting Services and Infosys.
Its information technology sector draws top engineering talent from across the country and accounts for roughly a quarter of Karnataka state's estimated $336 billion annual output, according to industry figures.
On Wednesday, the state's chief minister Siddaramaiah said his government was finalising a new law that would compel companies to ensure more than half of their workforce was made up of applicants who speak Karnataka's dominant language.
Siddaramaiah, who goes by one name, said in a post on X that the move was to make sure locals were not "deprived" of jobs and could "build a comfortable life in the motherland".
Indian tech industry body Nasscom said it was "seriously concerned" by the proposal, warning the move risked upending the industry and driving out established players.
"It is deeply disturbing to see this kind of bill which will... hamper the growth of the industry, impact jobs and the global brand for the state," it said in a statement.
Other leading figures from the industry also spoke out against the bill, including Kiran Mazumdar-Shaw, founder of pharmaceutical giant Biocon, who warned it could jeopardise Bengaluru's "leading position in technology".
Former Infosys chief financial officer Mohandas Pai said the bill was "discriminatory" and "regressive".
Nearly 5.5 million people work in information technology across India, with many of the most sought-after jobs in Bengaluru.
But the influx of Indians from elsewhere in the country has become a growing source of resentment in the city, particularly around the locally dominant Kannada language.
Around two-thirds of Karnataka residents speak Kannada but the language is barely used outside the state, while Hindi and English are the lingua franca of the city's IT sector.
Regionalist activists in the state have in the past protested over the use of English on signboards, and Siddaramaiah's government this year mandated that any public signage must be predominantly written in Kannada.
Tensions over linguistic identities are common in India, which is home to hundreds of regional languages.
Hindi, the most widely used of them all, is spoken as a first language only by 40 percent of the population.
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