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Karnataka Industrial Policy 2025-30

Overview

The Karnataka Industrial Policy 2025-30 is the latest industrial policy launched by the Government of Karnataka, unveiled in February 2025.
Key high-level goals:

  • Attract ₹7.5 lakh crore of investments during the policy period.

  • Create around 20 lakh (2 million) new jobs.

  • Achieve about 12% annual growth in the manufacturing sector.

  • Promote balanced regional development — not just focusing on Bengaluru but also under-developed districts.

Key Focus Areas

For business owners and entrepreneurs, these are the important thematic priorities:

  • High-Growth and Future Sectors: The policy emphasizes electronics system design & manufacturing (ESDM), aerospace & defence, future mobility, green hydrogen/renewables, advanced manufacturing, biotechnology, drones, AR/VR, etc.

  • Logistics & Warehousing: Recognition of logistics/warehousing as an industry, with separate incentives for infrastructure, land, power etc.

  • Green / Sustainable Industries: Incentives for green manufacturing, cleaner production, sustainable industrial zones, low-carbon technologies.

  • Regional Development & Investment Zones: Plan to set up 12 new investment zones across ~30,000 acres, in addition to existing industrial areas. Focus on building infrastructure, clean water, electricity, etc.

  • Ease of Doing Business & Digital Approvals: Upgradation of the Single Window System, digitalisation of approvals, real-time monitoring, investor facilitation.

  • Inclusive Growth: Special focus on incentives for units in backward taluks/districts, women-led enterprises, SC/ST entrepreneurs, etc.

Incentives & Business Owner Benefits

Here are some of the key incentives and support measures that business owners should note:

  • Flexibility: Enterprises can choose between capital subsidy or production-linked incentives (PLI) depending on their investment/turnover model.

  • Zona classification: Districts/taluks are classified into Zone-1, Zone-2, Zone-3 (with Zone-1/2 being more backward areas) and differential incentive rates apply.

  • Employment requirement revisions: The policy adjusts job creation thresholds acknowledging automation/AI—e.g., fewer jobs required per investment for certain categories.

  • Incentives for R&D + manufacturing: Units converting R&D operations into manufacturing get additional benefits (e.g., extra 10 % incentive).

  • Infrastructure support: New investment zones will have world-class infrastructure; funding is allocated (e.g., ~₹3,800 crore for clean water supply in industrial areas).

Eligibility & Application – What Business Owners Should Know

  • Ensure your enterprise is located in Karnataka and meets the sector/scale criteria as per policy.

  • Check which zone (1, 2 or 3) your district/taluk falls under to know incentive rates applicable.

  • Prepare a project report/business plan that aligns with the high-growth sectors targeted by the policy (e.g., electronics, defence, green tech).

  • Use the revamped Single Window System for approvals – digital application, faster clearances.

  • Be ready to meet employment, investment, and production milestones to claim incentives. The policy is performance-linked.

Important Considerations & Things to Watch

  • Even though incentives are generous, they come with compliance and performance requirements (jobs, production, investment timelines).

  • The policy emphasises future-tech and high-value manufacturing; smaller low-value units may not access the full benefits.

  • Infrastructure readiness in backward regions is improving but still may lag – factor into your business planning.

  • Incentive choice (subsidy vs PLI) means you need to evaluate what suits your business model better.

  • Monitor whether your sector is eligible under the policy’s preferred categories, or if there are exclusions.

  • Stay updated on notification rules, since detailed guidelines will be issued, and many benefits are conditional.

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