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PROCEEDINGS OF THE GOVERNMENT OF KARNATAKA

Sub:

Karnataka Industrial Policy 2025-30 – reg.

Read:

G.O. No. CI 199 SPI 2018, dated 13.08.2020.

*****

PREAMBLE:

Karnataka is a land of immense opportunity and innovation. It is ideally positioned to make

the future happen today. The State’s manufacturing operations are supported by critical enablers

such as a thriving ecosystem, a highly skilled and talented workforce, an empowering institutional &

policy environment, a favorable business climate and robust infrastructure.

Government of Karnataka comes out with industrial policies at regular intervals of five years

to ensure a well-balanced, sustainable and inclusive industrial development throughout the State.

The State Government had announced Industrial Policy 2020-25 for promoting manufacturing

industries in the State. This Policy came into effect from 13.08.2020 and had validity for a period of

5 years or till the announcement of the New Industrial Policy.

Karnataka has witnessed tremendous growth across key macroeconomic parameters such

as State Gross Domestic Product, Industrial Growth and investment inflows over the last few years.

Now is the time to change gears and embark onto a path of disruptive strategic reforms to place

Karnataka on the global value chain map.

Investments worth INR 5,00,360 crore over 2200 units were approved on a target of INR

5,00,000 crore despite the challenging times in Covid. Karnataka in doing so became the largest

¨sÁUÀ – 1

Part – I

2025

1946)

BENGALURU, TUESDAY, 11, FEBRUARY, 2025 MAGHA, 22, SHAKAVARSHA, 1946)

. 86

No. 86

exporting State (Merchandise + Services) in India for 2023-24. Also, 3,95,603 manufacturing MSME

enterprises are registered in Government of India’s Udyam portal from Aug 2020 to Sep 2024.

During the formulation of the Karnataka Industrial Policy 2025-30, several interactions and

stakeholder consultations were held across the State wherein views, demands and suggestions of

industry/industry associations/departments on key areas have been received and intricately

incorporated into the policy.

Karnataka Industrial Policy 2025-30 mission is to establish an investor-friendly ecosystem in

Karnataka by fostering a conducive manufacturing environment through collaboration with the

industry and developing human capital to meet the industry's demands.

Based on competitive strengths and growth potential, a policy has identified key focus

sectors to drive economic development and job creation across the State.

Invest Karnataka-2025: Global Investors Meet is scheduled to be held from

11^th-14^th February, 2025, which is a prestigious event of the State, wherein, the State

Government has to unveil the Karnataka Industrial Policy 2025-30 to attract new

investments. Hence, Karnataka Industrial Policy 2025-30 will be placed and ratified in the

next Cabinet Meeting.

In view of the above, a decision has been taken by the Government to formulate and

adopt Karnataka Industrial Policy for the period 2025-30. Hence, the following order:

GOVERNMENT ORDER No. CI 123 SPI 2024(e),

BENGALURU, DATED 08.02.2025.

In the circumstances explained in the preamble, Government is pleased to announce

the Karnataka Industrial Policy 2025-30 as detailed in Annexure, enclosed to this Order, to

enhance its stature as one of the leading high-tech industrialized States in the country and

is at the forefront of attracting investments from across the country and abroad.

The salient features of Karnataka Industrial Policy 2025-30 are as follows:

Vision

To position Karnataka as the #1 destination for High-technology manufacturing investments

in Asia through equitable and sustainable development.

Objectives

The Government of Karnataka envisions attracting investments of INR 7,50,000 Cr across

the sectors, generating approximately 20,00,000 new jobs during the Policy Period, and

attaining leadership in sunrise sectors in the State.

The policy objectives are as follows:

• Achieve an accelerated annual growth rate of 12% for the manufacturing sector with an

investment target of INR 7,50,000 Cr;

• Provide flexibility in incentives to stimulate interest from players across the sectors

targeted by Industrial Policy;

• Create employment opportunities for 20,00,000 people by 2030;

• Become a pioneer in sustainability by incentivizing green and sustainable initiatives by

investors: Offer sustainability-linked incentives to promote green measures by the existing

and new investors while also promoting green industrial areas;

• Balanced and Inclusive Regional Development of Karnataka:

 Differential incentives for different regions of Karnataka based on the level of industrial

growth

 Rationalization of minimum employment threshold with employment booster and

additional incentives for women participation in the workforce.

• Attain Leadership in sunrise and new age sectors: Focus on innovation driver sectors like

ESDM, Advanced Manufacturing, Aerospace and Defence, Future Mobility, Augmented

Reality/Virtual Reality etc.

• Create a seamless experience for investors by digital enablement of Single Window

System and dedicated Nodal Officers

 Dedicated Nodal officers to support investors in their end-to-end investment journey in

Karnataka

 Enhanced digital system powered by AI/ML-based vernacular chatbots

 Rationalization of SLAs for approvals and setting up cadence for LACs, SHLCC/

SLSWCC

 Incentive calculator tool for investors

The Karnataka Industrial Policy 2025-30 and package of incentives and concessions shall

come into effect from 08.02.2025 and will be valid for a period of 5 years or till a new policy is

announced.

This order is issued with the concurrence of the Finance Department vide Note No.

FD/527/Exp-1/2024, dated 03.02.2025; IT, BT Department vide Note No. ITBT/21/ PRM/2024, dated

20.01.2025; Energy Department vide Note No. ENERGY/S/VSC/ 2025, dated 09.01.2025; C&I

(MSME) Department vide Note No. CI/108/SSI/2024, dated 29.01.2025; Skill Development

Department vide Note No. SDEL/24/ITM/2025, dated 29.01.2025; Transport Department vide Note

No. TD/280/TDO/2024, dated 29.01.2025; Planning Department vide Note in File No.

CI/123/SPI/2024(P11); Tourism Department vide Note in File No. CI/123/SPI/2024(P13); Labour

Department vide Note No. LD/113/KHABHANI/2024, dated 03.02.2025; and approval of the

competent authority in File No. CI/123/SPI/2024.

By Order and in the name of the

Governor of Karnataka,

Sd/-

(Dr. S. SELVAKUMAR)

Principal Secretary to Government,

Commerce & Industries Department.

Table of Contents

1. Vision, Mission, and Objectives ......................................................................... 2

2. Validity of the policy ..................................................................................... 4

Karnataka’s existing ecosystem ...................................................................... 5

Policy Framework ......................................................................................18

Flexible and Competitive Financial Incentives ....................................................20

Enabling World-Class Industrial Infrastructure ....................................................37

Revamping Single Window System for Ease of Doing Business ..................................41

Ensuring Future-Ready Human Capital .............................................................43

Promotion of Sustainability ..........................................................................45

10 Logistics and warehousing ............................................................................48

11 Bridging Innovation Continuity .......................................................................53

12 Ensuring Inclusive Development in Karnataka .....................................................57

13 Governance mechanism ...............................................................................65

14 Annexures ...............................................................................................66

1. Vision, Mission, and Objectives

Karnataka is a land of immense opportunity and innovation. It is ideally positioned to make the

future happen today. The State’s manufacturing operations are supported by critical enablers

such as a thriving ecosystem, a highly skilled and talented workforce, an empowering

institutional & policy environment, a favorable business climate, and robust infrastructure.

Government of Karnataka comes out with industrial policies at regular intervals of five years to

ensure a well-balanced, sustainable, and inclusive industrial development throughout the

State. The State Government had announced Karnataka Industrial Policy 2020-25 for promoting

manufacturing industries in the State. This Policy came into effect from 13.08.2020 and had

validity for a period of 5 years or till the announcement of the New Industrial Policy.

During the formulation of the New Industrial Policy 2025-30, several interactions and

stakeholder consultations were held across the State wherein views, demands, and suggestions

of industry/industry associations/departments on key areas have been received and intricately

incorporated into the policy.

The new industrial revolution presents new opportunities for industry, particularly

manufacturing and manufacturing-related service industries including smart manufacturing,

customization, collaborative production, etc.

1.1 Vision

To position Karnataka as the #1 destination for High-technology manufacturing investments in

Asia through equitable and sustainable development

1.2 Mission

To establish an investor-friendly ecosystem in Karnataka by fostering a conducive

manufacturing environment through collaboration with the industry and developing human

capital to meet the industry's demands.

1.3 Objectives

The Government of Karnataka envisions attracting investments of INR 7,50,000 Cr across the

sectors, generating approximately 20,00,000 new jobs during the Policy Period, and attaining

leadership in sunrise sectors in the State.

The policy objectives are as follows:



Achieve an accelerated annual growth rate of 12% for the manufacturing sector with an

investment target of INR 7,50,000 Cr



Provide flexibility in incentives to stimulate interest from players across the sectors

targeted by Industrial Policy



Create employment opportunities for 20,00,000 people by 2030



Become a pioneer in sustainability by incentivizing green and sustainable initiatives by

investors: Offer sustainability-linked incentives to promote green measures by the

existing and new investors while also promoting green industrial areas



Balanced and Inclusive Regional Development of Karnataka:

- Differential incentives for different regions of Karnataka based on the level of

industrial growth

- Rationalization of minimum employment threshold with employment booster and

additional incentives for women participation in the workforce



Attain Leadership in sunrise and new age sectors: Focus on innovation driver sectors

like ESDM, Advanced Manufacturing, Aerospace and Defence, Future Mobility,

Augmented Reality/Virtual Reality, etc



Create a seamless experience for investors by digital enablement of Single Window

System and dedicated Nodal Officers

- Dedicated Nodal officers to support investors in their end-to-end investment journey

in Karnataka

- Enhanced digital system powered by AI/ML-based vernacular chatbots

- Rationalization of SLAs for approvals and setting up cadence for LACs,

SHLCC/SLSWCC

- Incentive calculator tool for investors

2 . Validity of the policy

This policy shall be valid for a period of five years from the date of issue of the Government

Order or till such time that a new policy is introduced by the Government of Karnataka.

Further, the policy is valid for New Manufacturing Investments in Karnataka with the categories

defined below. To calculate incentives, the following classification will be considered as per

the below table irrespective of the definitions of MSMEs under the MSMED Act.

Category

Investment Amount in Plant and Machinery (INR Crore)

Micro

Upto 1

Small

>1-10

Medium

>10-50

Table 1- Definition of Micro, Small and Medium Investments

Category

Minimum Total Capital Investment Amount (INR Crore)

Large

>50 – 300

Mega

>300 – 1000

Ultra Mega

>1000

Table 2- Definition of Large, Mega, and Ultra Mega Investments

Further, investments for expansion of capacity will be considered for capital expenditure of

new manufacturing facilities set up by an existing enterprise for manufacturing a product that

is already being manufactured with / without up-gradation of technology or the process.

Further, the enterprise to be eligible for incentives under the expansion program must

increase the capital expenditure by at least 25% of the existing fixed investment.

Investment

Eligibility for Incentives

New

Eligible for incentives basis Category of Investment

Existing Enterprise

Additional investment of at least 25% of existing fixed assets

Table 3- Eligibility for incentives

Further, manufacturing entities eligible under the sectoral policies of Karnataka can also claim

incentives under the new Industrial Policy 2025-30. The entity will be able to claim benefits

under a single policy (Either Industrial Policy 2025-30 or Sectoral Policy).

3 Karnataka’s existing ecosystem

Karnataka has witnessed tremendous growth across key macroeconomic parameters such as

State Gross Domestic Product, Industrial Growth, and investment inflows over the last few

years. Now is the time to change gears and embark onto a path of disruptive strategic reforms

to place Karnataka on the global value chain map.

Karnataka has continued to see substantial growth in recent years, with the state's Gross State

Domestic Product (GSDP) rising to approximately INR 22.4 trillion (US$ 271.39 billion) in the

fiscal year 2022-23 contributing 8.7% of India’s GDP, demonstrating a robust compound annual

growth rate of 11.51% from 2015-16 to 2022-23 as per India Brand Equity Foundation. In terms

of macroeconomic stability, the latest Economic Survey revealed that Karnataka's GDP grew by

7.9% during 2022-23, and the state has made significant strides in per capita income, which

increased by 13.6% at current prices during the same period.

The industrial and manufacturing sectors continue to contribute significantly to the state's

economy. In 2022-23, the industry sector grew by almost 6%, showing a gradual recovery from

the impacts of COVID-19. Meanwhile, the services sector, bolstered particularly by IT-related

services, grew by 9.2%.

Government initiatives have also focused on enhancing Karnataka’s stature as a leading high-

tech industrialized state. It ranks first in attracting investment intentions and has attracted

significant Foreign Direct Investment (FDI), recording $48.12 billion between October 2019 and

December 2023, representing 23% of the total FDI accruals for India during this periodand thus

ranking 2nd in the country in FDI attraction.

These figures highlight Karnataka's continued economic resilience and growth, underpinning its

role as a dynamic player in India's economic landscape, particularly in high-tech and industrial

sectors. The state's emphasis on sectors like artificial intelligence, data analytics, machine

learning, and robotics has poised it well for future growth and integration into the global value

chain.

Government has taken many initiatives to enhance its stature as one of the leading high-tech

industrialized States in the country and is at the forefront of attracting investments from

across the country and abroad in disruptive technologies viz. Artificial Intelligence,

Automation, Electronics Manufacturing, Machine Learning, 3D Printing and Robotics, etc.

3.1 Robust Infrastructure to Support Industrial Growth:

Karnataka has a strong history of robust and high-quality industrial infrastructure. Karnataka

Industrial Area Development Board has developed more than 200 industrial areas with around

85,000+ acres of industrial land allocated to more than 25,000 units across the state.

Karnataka has an extensive network of roads traveling almost 0.35 million Km. Karnataka ranks

2^nd in the country for distance of state highways and has 13 National Highways running through

the state.

Karnataka state has a robust and ever-increasing railway network with a total track running

about 6,623 km as per Indian Railways Yearbook. This extensive network is managed by the

Southwestern Railway Zone, South Central, Southern Central, and Konkan Railway Networks.

Further state has taken initiatives to improve the intra-city rail infrastructure by suburban rail

projects as well as enhancing the metro projects for improved urban mobility. Multiple new

rail projects are being implemented. Bengaluru Metro has total services across 73.81 km with

43.5 km on the East-West Corridor and 30.32 km on the North-South Corridor. Further Phase 2,

Phase 2-A, and Phase 2-B are ongoing to add a capacity of 101.73 km with an additional 67

stations. Phase 2-B of the project will connect the Bengaluru city to Karnataka International

Airport Terminal. Further, upcoming Phase 3 and Phase 3-A will add 79 km of metro lines and

an additional 69 stations

Karnataka has 9 airports at Bengaluru, Mangalore, Mysore, Belagavi, Hubbali, Bidar, Kalaburgi,

Ballari, and Shivamogga. Karnataka's airport infrastructure is rapidly expanding to meet the

growing demands of its economic and tourism sectors. The state is served by Kempegowda

International Airport in Bengaluru, which is one of India's busiest airports, offering both

domestic and international flights. Additionally, airports like Mangaluru International Airport

and Hubli Airport facilitate significant passenger and cargo traffic, enhancing regional

connectivity. Karnataka also has smaller airports such as Mysuru and Belagavi airports that

cater to domestic travelers and support local economic development. Recent developments

include the commissioning of a new airport in Shivamogga, while the ongoing construction of

airports in Vijayapura and Hassan, underlining the state's initiative to improve its aviation

infrastructure further. These developments are expected to bolster Karnataka’s links with

other global and national destinations, making it a pivotal aviation hub in South India.

Bengaluru airport has expanded with new Terminal 2 which has further bolstered the cargo

handling capacity of the Bengaluru Airport.

Karnataka's seaport infrastructure plays a vital role in its economic landscape, particularly

through its major port, New Mangalore Port, located at Panambur near Mangaluru on the west

coast of India. This port is crucial for the export of major commodities like iron ore, coffee,

and cashew nuts, and it provides facilities for handling a variety of cargo, including crude oil,

LPG, and other bulk and container cargo. Apart from the New Mangalore Port, Karnataka also

has several minor ports including Karwar, which is another significant port contributing to the

maritime trade in the region. These ports collectively facilitate significant trade both

internationally and with other coastal states of India, enhancing Karnataka’s profile in the

logistics and transport sector. The strategic development of these ports, supported by

favorable government policies, is poised to boost Karnataka’s industrial growth by improving

connectivity and reducing transportation costs for trade.

Karnataka ranks 4^th among Indian states in the percentage of Renewable Energy installed

capacity. Karnataka has 63% of its installed capacity from Solar, wind, and other renewable

sources. The state has further encouraged private investments in Renewable Energy with a

progressive Karnataka Renewable Energy Policy 2022-27.

3.2 Achievements in 2020-25 Industrial Policy

Investments worth ~INR 5,00,360 crore over 2200 units were approved on a target of INR

5,00,000 crore despite the challenging times in Covid. The employment generation in these

approvals was around 7,63,428 in the period between 2020-2024. Karnataka in doing so

became the largest exporting State (Merchandise + Services) in India for 2023-24. Also,

3,95,603 manufacturing MSME enterprises are registered in Government of India’s Udyam

portal from Aug 2020 to Sep 2024.

The contribution of industry and manufacturing sector to Gross State Domestic Product (GSDP)

stood at 26.60% percent during 2022-23. The State recorded 1,66,544 Million USD worth of

exports in 2023-24, constituting 21.39% of the country’s exports and becoming the largest

exporting state in India. The largest contributing sectors were software exports followed by

engineering products, petroleum products, readymade, basic chemicals and pharmaceuticals.

Further, 40 new Industrial Areas were developed by KIADB from FY 2020 to FY 2024 with a total

extent of 24,000 acres of industrial land. Dharawad Industrial Node across ~3000 acres,

Haraluru Muddenahalli (Hitech Defence and Aerospace Park Phase – II) across ~1200 acres,

Devanahalli General Industrial Area (ITIR) across 1,000 acres, Dobaspet 5^th Phase across 800

acres and Metikurke Industrial Area in Chitradurga district across ~1150 acres are some of the

big Industrial Parks developed or under development in last 5 years.

3.3 Sector Coverage for various policies of Karnataka

Any state needs to understand the strengths and identify focus sectors to set the priority for

driving investor outreach and industrial development. The following sectors have been

identified under 3 key themes for Karnataka:



GDP Accelerators: The sectors that have high-value addition in the net output while

also becoming the key cogs of the supply chain;



Employment Generators: Sectors with high dependence on human capital;



Innovation Drivers: New and sunrise sectors heavily dependent on R&D and Technology

to obtain a cutting-edge lead.

Karnataka state has multiple policies for various focus sectors and the companies can refer to

the following table for respective policies.

Category

Sectors

Current Policy

GDP Accelerator

Aerospace and Defence

Aerospace &Defence Policy 2022-27

Electronic Components

Special Incentives Scheme for ESDM

Sector 2020-25

Core Manufacturing (Steel,

Cement, Metals)

Industrial Policy 2025-30

Warehousing and Logistics

Industrial Policy 2025-30

Employment

Generators

Textiles

Textile and Garment Policy 2019-24

Electronic Manufacturing

Services

Special Incentives Scheme for ESDM

Sector 2020-25

Manufacturing Support Services

Industrial Policy 2025-30

Tourism

Karnataka Tourism Policy 2024-29

Innovation

Drivers

Future Mobility -

Battery/EV/Fuel Cell

Electric Vehicle and Energy Storage

Policy 2017

Green Hydrogen

Renewable Energy Policy 2022-27

Industrial Robots

Special Incentives Scheme for ESDM

Sector 2020-25

Drones

A&D Policy 2022-27

Semi-Conductor Manufacturing

Special Incentives Scheme for ESDM

Sector 2020-25

AR/VR/Smart Devices

AGVC-XR Policy 2023

Med Tech

Special Incentives Scheme for ESDM

Sector 2020-25

Space Tech

A&D Policy 2022-27

Biotechnology

Biotechnology Policy 2024-29

Other Sectors

Renewable Energy

Renewable Energy Policy 2022-27

Software and IT Services

IT Policy 2020-25

Pharmaceuticals

Industrial Policy 2025-30

Machine Tools

Industrial Policy 2025-30

Capital Goods

Industrial Policy 2025-30

Category

Sectors

Current Policy

Toys

Industrial Policy 2025-30

Automobile

Industrial Policy 2025-30

FMCG (Food/Consumer Goods

manufacturing

Industrial Policy 2025-30

Table 4- Karnataka’s policies across various sectors

Based on competitive strengths and growth potential, the policy has identified key focus

sectors to drive economic development and job creation across the state. Karnataka’s existing

ecosystem in some of the key sectors have been highlighted below.

1.Aerospace and Defence

Karnataka is a recognized hub for aerospace and defense equipment design and manufacturing

in India. The state accounts for 67 percent of all aircraft and helicopter manufacturing for

Defence services and 25% of India’s aircraft and spacecraft industry. Karnataka boasts 70% of

the supplier base with 2000+ SMEs with the capability to carry out niche sub-contracting work.

Bengaluru, the state's capital, is India's largest aerospace cluster, housing major companies

like HAL, ISRO, and NAL and creating an extensive ecosystem of parts, components, and

systems suppliers. The presence of numerous Defense Services laboratories further cements

Bengaluru-Karnataka's status as the Aerospace & Defense Capital of India. Major global

aerospace players such as Airbus, Boeing, Honeywell, UTC (Collins), GE, and Rolls Royce have

established engineering and R&D centers in Bengaluru, enhancing the state's prominence in this

sector.

Karnataka state benefits from a well-established industrial base, a robust supplier network,

and a concentration of skilled talent, fostered by the presence of top-tier educational and

research institutions. The government's proactive initiatives underscore Karnataka's

commitment to high-end training, skill development, and creating industry-ready manpower.

Karnataka’s strategic focus not only attracts significant investment but also ensures a

continuous pipeline of innovation and technological advancements, maintaining the state’s

leadership in the aerospace and defense industries. Karnataka has a dedicated sectoral park in

Bengaluru Rural District - Aerospace and Defence Park Phase 1, Aerospace SEZ and Hi-Tech

Aerospace and Defence Park Phase 2. Further, there is a dedicated industrial area Aequs SEZ in

Belagavi to highlight Karnataka’s focus on the development of Aerospace and Defence

industries.

The applicable incentives and concessions for the promotion of industries in the Aerospace and

Defence sector will be as per Karnataka Aerospace and Defence Policy 2022-27.

2.Electronic Components

Karnataka has established itself as a premier hub for the Electronics System Design and

Manufacturing (ESDM) sector in India. The state is home to global giants like Foxconn,

Schneider Electric, General Electric, Cisco, Qualcomm, and Texas Instruments, which have

significantly contributed to its robust ESDM ecosystem. Bengaluru, with its world-class

infrastructure, skilled manpower, and proximity to an international airport, serves as the focal

point for these activities. The state has successfully attracted substantial investments across

the ESDM value chain, encompassing manufacturing, design, and research and development.

Moreover, Karnataka has over 2,000 electronics start-ups, further showcasing its commitment

to innovation and technological advancement in the sector.

Karnataka's strengths in the ESDM sector are bolstered by several strategic initiatives and

policies. The Karnataka Special Incentives Scheme for ESDM Sector (2020-2025) offers various

fiscal incentives such as capital investment subsidies, reimbursement of stamp duty and

registration charges, and power tariff reimbursements. Karnataka is focused on developing a

dedicated Electronics Manufacturing Cluster in collaboration withthe Government of India in 3

locations – Kochanahalli – Mysuru, Kotur-Belur – Dharawad and Adinarayana hosahalli –

Bengaluru Rural. This will help fostering collaboration between industry and academia ensuring

a continuous supply of skilled professionals and cutting-edge research. These efforts position

Karnataka as a competitive and attractive destination for ESDM investments, driving sustained

growth and innovation in the sector.

3. Core Manufacturing (Steel, Cement, Metals)

Cement

Karnataka is a prominent cement-producing state, ranking seventh in India. The state boasts

around 17,253 million tons of limestone deposits, an essential raw material for cement

production. Annually, Karnataka produces more than 11 million tons of cement, contributing

6.5% to the national output. The state hosts 22 cement units with a combined production

capacity of around 16 MMTPA. Kalaburagi is one of India's key cement clusters, further

solidifying Karnataka's position in the cement industry.

Steel

Karnataka is a major player in India's steel industry, with significant iron ore resources

primarily located in Bellary, Chitradurga, Koppal, and Tumakuru districts. The state has an

estimated 2 billion metric tonnes of iron ore and abundant reserves of other essential

minerals. Karnataka contributes approximately 13.7% to the nation's steel production, with 18

steel production units having a combined capacity of around 22 MMTPA. Major steel plants like

JSW Steel, Kalyani Steels, and Mukund Steels are based in the state, with JSW Steel's

Vijayanagar plant being the largest single-location steel facility in the country.

Metals

Karnataka's rich mineral resources extend beyond iron ore, including significant deposits of

manganese, silica, and limestone, which are crucial for various metal industries. The state's

comprehensive mineral policy supports the sustainable development of its metal sector. With

initiatives to attract investment and foster innovation, Karnataka is home to leading metal

manufacturing and processing companies. The state's strategic location, skilled workforce, and

robust infrastructure make it a preferred destination for metal industry investments.

The applicable incentives and concessions for the promotion of industries in Core

Manufacturing sectors will be as per the Industrial Policy 2025-30.

4. Warehousing and Logistics

Karnataka's logistics and warehousing sector has been a vital contributor to the state's

economic growth. The state boasts over 1,622 warehousing facilities with a combined capacity

of approximately 42.48 lakh metric tons and 233 cold storage facilities with a capacity of

6,76,832 metric tons. Major logistics parks and Inland Container Depots (ICDs) further support

the robust logistics infrastructure.

Karnataka's strategic geographical location and extensive infrastructure are key strengths in its

warehousing and logistics sector. Karnataka's commitment to technological advancements and

sustainability is evident in initiatives like promoting electric vehicles for internal

transportation and encouraging green certifications. The state also emphasizes digital

integration with systems like the Unified Logistics Interface Platform (ULIP) and smart

enforcement technologies. These factors position Karnataka as a competitive and attractive

destination for logistics and warehousing investments, driving sustained growth and innovation

in the sector.

The state’s favorable policies, such as the Industrial Policy 2025-30 offer various fiscal

incentives, ease of doing business, and initiatives to upskill the workforce.

5. Textiles

Karnataka is a leading hub for the textiles and apparel industry in India, known as the Garment

Capital of India. The state is a major producer of raw materials such as silk, wool, and cotton,

contributing significantly to the nation’s textile output. Bengaluru alone houses over 2,000

garment units, contributing to 20% of India’s garment production and 20% of the nation’s

apparel exports. Major companies like Gokaldas Exports, Shahi Exports, and Himatsingka Seide

have established a strong presence in the state, driving innovation and excellence in textile

manufacturing and export.

The state has established numerous textile parks, such as the integrated textile park in

Doddaballapura, SEZ in Hassan, Shiggaon Textile Park and facilities in Chamarajanagar

Industrial Area. The presence of leading fashion technology institutes like NIFT and multiple

garment training centers ensures a continuous supply of skilled labor, making Karnataka a

preferred destination for textile investments.

The Karnataka Textile and Garment Policy 2019-24 offers various incentives, including capital

subsidies, power subsidies, and wage subsidies, to encourage investment.

6. Global Capability Centers/Research & Development Centers

Karnataka is a leader in the establishment of knowledge-based industries such as information

technology, biotechnology, and engineering. The state is home to over 400 multinational

companies with global R&D centers in Bengaluru, including prominent names like GE, GM,

Intel, Texas Instruments, and IBM. This concentration of Global Capability Centers (GCCs) is

among the largest in the world. Bengaluru, recognized as the fourth largest technology cluster

globally by the United Nations, contributes significantly to the state's reputation as a hub for

innovation and research.

Karnataka's R&D sector has flourished due to its robust infrastructure, skilled workforce, and

supportive policies. The state contributes approximately 40% to India's ER&D revenues and

houses 50% of the country's R&D talent. With premier institutions like IISc, IIT Dharwad, and

numerous innovation hubs, Karnataka fosters a rich academic ecosystem. The state’s proactive

initiatives, strategic collaborations, and comprehensive support systems make Karnataka a

preferred destination for R&D investments and activities.

7. Future Mobility

Karnataka is at the forefront of the clean mobility sector in India, which includes electric

vehicles (EVs), battery technology, and fuel cell technology, among others. As the first state to

introduce a dedicated Electric Vehicle and Energy Storage Policy in 2017, Karnataka has

successfully attracted investments across the entire value chain including in battery pack and

cell manufacturing, component production, OEMs, charging and testing infrastructure, and

research and development. Bengaluru is home to major players like Mahindra Electric (Reva)

and Ather Energy, as well as India's first Public Electric Vehicle Charging Station by BESCOM.

With around 200,000 EVs registered, Karnataka ranks third in the nation, showcasing its

commitment to transforming the mobility landscape. As per Bureau of Energy Efficiency,

Karnataka has the highest number of public EV charging stations (5,765) of which 4,462 are in

Bengaluru Urban District alone.

Karnataka's focus on modernization and new-age technologies, such as additive manufacturing

and advanced battery cell manufacturing, positions it at the forefront of the automobile and

electric vehicle industries. The state also promotes partnerships with educational institutions,

such as the collaboration with Tata Technologies Ltd to transform 150 ITIs into technology

hubs, training thousands annually in various aspects of EV technology. Karnataka’s upcoming

Clean Mobility Policy will emphasize developing clean mobility clusters, enhancing charging

infrastructure, and supporting research and skill development. These initiatives, combined

with Karnataka's substantial pool of skilled professionals and strong R&D capabilities, position

the state as a leader in sustainable transportation technologies.

The applicable incentives and concessions for the promotion of industries in the Clean Mobility

sector will be as per the Electric Vehicle and Energy Storage Policy 2017.

8. Green Hydrogen

Karnataka is emerging as a key market in the green hydrogen sector, driven by its robust

renewable energy eco-system and supporting infrastructure. The State will shortly notify its

green hydrogen policy, which included concessional inter-state transmission charges and

priority access to renewable energy. Major companies are increasingly investing in this

emerging sector, leveraging Karnataka's infrastructure and government incentives.

With significant investments in solar, wind, and hybrid renewable energy, energy storage and

hydropower, the state is well-positioned for green hydrogen innovation across its value chain.

The State’s proactive measures in manufacturing such as dedicated manufacturing zones and

infrastructure ensure promising growth opportunities to attract significant investments.

9. Industrial Robots

Karnataka is a burgeoning hub for industrial robots, driven by a strong industrial base and

leading technology companies like ABB and Fanuc India. The state, particularly Bengaluru,

hosts numerous automation firms and contributes significantly to India's automation sector.

With robust infrastructure, a skilled workforce, and supportive policies, Karnataka is well-

positioned for growth in the industrial robotics market with its focus on Industry 4.0,

enhancing productivity and technological advancement.

10. Drones

Karnataka is rapidly emerging as a key player in the drone industry, supported by a thriving

ecosystem of tech companies and start-ups such as Skylark Drones, NewSpace, and Throttle

Aerospace Systems. The state’s favorable regulatory environment and robust R&D ecosystem

promote drone usage across agriculture, surveillance, and logistics. With increasing

applications, Karnataka's drone industry has immense growth potential.

11. Augmented Reality/ Virtual Reality/Smart Devices

Karnataka, particularly Bengaluru, is a leading hub for AR/VR and smart devices, hosting tech

giants like Infosys and Wipro, along with start-ups like Tesseract. The state contributes

significantly to India's AR/VR market with its advanced IT infrastructure and innovation

centers. Karnataka’s strengths include a skilled talent pool and supportive policies, positioning

it as a leader in digital innovation and immersive technologies.

12. Med Tech

Karnataka's medical devices and equipment industry is steadily growing, focusing on the less

technology-intensive segments and disposable supplies. The state is working towards

indigenous manufacturing of diagnostic equipment like MRI, ultrasound machines, and X-ray

machines. Plans include establishing a med-tech zone near Bengaluru, equipped with

comprehensive infrastructure facilities for manufacturing and innovation, including calibration,

testing, quality control, and waste management.

Karnataka's strengths in the med-tech sector are driven by its robust infrastructure, strategic

initiatives, and skilled workforce. The state's policies support the development of medical

devices and equipment, promoting local manufacturing to reduce dependence on imports.

Karnataka's strategic location, coupled with its supportive regulatory environment, positions it

as a hub for medical technology innovation and manufacturing, attracting significant

investments in this sector.

The applicable incentives and concessions for the promotion of the Med Tech sector will be as

per the Special Incentives Scheme for ESDM Sector 2020-25.

13. Space Tech

Karnataka is a significant player in India's space tech sector, with Bengaluru being home to the

Indian Space Research Organisation (ISRO) and space tech startups such as Bellatrix Aerospace,

NoPo, Nanotech, and Pixxel. The state excels in satellite technology and space research,

contributing to national and global space missions. Karnataka’s advanced infrastructure, skilled

workforce, and government support drive its leadership in space technology and innovation.

14. Biotechnology

Karnataka is recognized as the biotech capital of India, contributing 35% of the country's

biotech revenue. The state houses 380 biotech companies and 194 start-ups, forming 60% of

India's biotech enterprises. With renowned institutions like IISc, NCBS, and JNCASR, Karnataka

boasts a strong research base. Initiatives such as Bangalore Bio innovation Centre and

Biotechnology Skill Enhancement Programme (BiSEP) further bolster the sector's growth,

positioning Karnataka as a global biotech hub.

Karnataka's biotechnology sector excels due to its well-established ecosystem, extensive

research infrastructure, and skilled talent pool. The state's policies provide comprehensive

support, including fiscal incentives, incubation facilities, and funding for biotech start-ups.

Karnataka's focus on multidisciplinary collaborations and leveraging IT capabilities enhances its

competitiveness, making it a preferred destination for biotech investments and innovation.

The applicable incentives and concessions for the promotion of the Biotechnology sector are as

per Karnataka’s Biotechnology Policy 2024-29.

15. Renewable Energy

Karnataka is a leading state in India for renewable energy, with an installed capacity of 18,444

MW as of November 2024. The state excels in various renewable sources, including solar, wind,

hydro, and biomass. Karnataka's solar energy capacity is particularly notable, featuring one of

the world’s largest solar parks Pavagada, with a capacity of 2050 MW. Efforts are underway to

enhance the Park’s capacity to 2352 MW. Over 400 companies operate within Karnataka's

renewable energy ecosystem, contributing significantly to the state's energy mix and green

growth, making it the top producer of solar energy in India.

Karnataka's strengths in renewable energy are driven by robust policies and strategic

initiatives. The state was the first in southern India to implement a solar policy that promoted

diverse renewable energy projects. Karnataka has a solar PV potential of about 721 GW, a wind

energy potential of 124 GW, and 8 GW of pumped storage hydropower. The state’s proactive

approach, supported by incentives and infrastructural advancements, positions Karnataka as a

prime destination for renewable energy investments, fostering a sustainable and resilient

energy future.

The applicable incentives and concessions for the promotion of industries in the Renewable

Energy sector are as per the Renewable Energy Policy 2022-27 and as per the ESDM Policy for

Solar Cells and Photovoltaic Module Manufacturing. Additionally, solar cell and Photovoltaic

module manufacturers are also eligible for incentives as per the Karnataka Industrial Policy

2024 – 2029.

16. Pharmaceuticals

Karnataka is a significant player in India's pharmaceutical industry, ranking 5th in pharma

exports and contributing 10% to the national pharma revenue. The state exports 40% of its

pharmaceutical production. Karnataka is home to 221 formulation units and 74 bulk drug units,

supported by Pharma Special Economic Zones in Hassan and several Pharma Industrial Areas.

The state also boasts 35 Clinical Research Organizations (CROs) and 12 Adverse Drug Reaction

(ADR) Reporting Centers. Planned developments include Pharma Parks in Mangaluru, Yadgiri,

Nagamangala, and Shivamogga, aiming to further boost the sector.

The state government offers various incentives, including financial grants for R&D and setting

up finishing schools to enhance skilled manpower. The presence of a strong research base and

favorable business environment makes Karnataka a preferred destination for pharmaceutical

investments, fostering growth and innovation in the industry.

17. Automobile

Karnataka stands as the fourth largest automobile producer in India, contributing 8.5% to the

national output. It hosts leading global companies such as Mercedes (Daimler), Bosch, Toyota,

Volvo, Tata Motors, Scania, etc. With seven major OEMs and more than 50 auto component

manufacturers, Karnataka boasts five auto-specific clusters, establishing itself as a central hub

for the automobile and electric vehicle industry in India.

Karnataka's auto sector thrives on its robust industrial base, extensive supplier network, and

strategic location. Bengaluru, the state capital, ranks second after Delhi in the number of

vehicles on its roads, underscoring the strong local demand. As India focuses on gradually

phasing out internal combustion engines, particularly in the two-wheeler and three-wheeler

sectors, Karnataka is poised to adapt and innovate. The government has also formed a vision

group comprising industry leaders and experts to assess the needs of the sector, recommend

corrective measures, and ensure sustained growth, further enhancing the state's leadership in

the automobile industry.

The applicable incentives and concessions for the promotion of industries in the Automobile

sector will be as per the Industrial Policy 2025-30.

18. Capital Goods

Karnataka boasts a robust ecosystem for capital goods, driven by a strong industrial base,

skilled workforce, and advanced infrastructure. The state is home to numerous manufacturing

units, R&D centers, and a thriving SME sector that supports the production of high-quality

capital goods like BEML, Volvo Construction Equipment, L&T Construction & Mining Machinery,

Tata Hitachi, etc. Businesses in this sector can benefit from Industrial Policy 2025-30 and

schemes promoting ease of doing business. Additionally, initiatives focusing on infrastructure

development and skill enhancement further bolster the growth and competitiveness of the

capital goods ecosystem in Karnataka.

19. FMCG (Food and Consumer Goods Manufacturing)

Karnataka boasts a robust ecosystem in food processing and consumer goods manufacturing.

The state is a leading producer of key agricultural products like coffee, ragi, sunflower, and

tomatoes, contributing significantly to India's food supply. Karnataka has established over 150

operational cold storage units with a capacity exceeding 300,000 metric tons. Major companies

such as ITC, MTR Foods, Nestle, and Britannia have a strong presence, leveraging the state’s

infrastructure, including integrated mega food parks and agro-processing clusters.

The state offers extensive incentives, such as Capital/Base subsidies and tax exemptions under

Industrial Policy 2025-30 to attract and retain businesses. With well-developed market

linkages, including 285 Farmer Producer Organizations (FPOs) and several public-private

partnership projects, Karnataka has significant growth potential. The state’s commitment to

innovation and sustainable practices, coupled with a skilled workforce, positions it as a leading

hub for FMCG and food processing industries.

Regions of North Karnataka have significant potential to be developed as a Food Processing hub

in Karnataka. Further, the State Government vide Order No. CI 287 SPI 2020, dated 30.04.2022

had sanctioned the special package of incentives to FMCG cluster in Dharwad District, which is

in operation for 5 years.

20. Tourism

Karnataka, with its brand promise of "One State, Many Worlds," offers a diverse range of

tourism opportunitiesacross a range ofthemes including heritage, culture, ecotourism,

spiritual, adventure, coastal, wellness, rural, andurban tourism. With increased business travel

and marquee events, the State’s opportunities extend beyond the leisure segment. The state’s

pleasant climate, robust infrastructure, and responsive governance make it a preferred

destination for investors looking to tap into India’s growing tourism market.

In 2023, Karnataka recorded over 28 crore domestic tourist visits and 4 lakh foreign tourist

visits, solidifying its position as a premier tourism hub. The state aims to rank among the top 3

states for domestic tourist footfallsand the top 5 states for international tourist footfalls by

2029, highlighting its commitment to scaling its tourism ecosystem.

The policy focuses on 25 tourism themes and promotes public-private partnerships to unlock

investment potential. The policy offers a range of fiscal and non-fiscal support to investors and

entrepreneurs and encourages the convergence of government programs for the sector’s

overall development. The policy targets the creation of 1.5 lakh jobs during the policy period,

fostering skill development and inclusivity while emphasizing sustainability. Investment

opportunities span hospitality, adventure tourism, wellness, cruise tourism, meetings and

events infrastructure (MICE), digital tourism, rural tourism, and other niche tourism

experiences.

Karnataka’s progressive policies, thriving tourism ecosystem, and commitment to sustainability

position the state as one of India’s most promising tourism markets and an ideal destination for

long-term, profitable tourism investments.

4 Policy Framework

Multiple stakeholder consultations were conducted and suggestions on best practices and

feedback on the existing Industrial policy was solicited. The existing policy has benefited a

significant number of companies under both MSME as well as Large and beyond categories.

Stakeholders from various industries like Steel, Auto, Cement, Textiles, and Pharma have

provided inputs for a progressive and competitive Industrial Policy.

Various themes emerged for a progressive policy like confidence-inducing financial incentives,

push on world-class infrastructure, digital enablement of processes for improving Ease of Doing

business and ensuring a future-ready talent pipeline. Further focusing innovation-driven

sustainable, inclusive development through efficient governance of the policy.

The following framework defines the key pillars and enablers of Industrial Policy 2025-30

4.1 Design Principles of Industrial Policy 2025-2030

A clear strategy has been identified with 4 key pillars and 4 enablers to strengthen the

manufacturing base of Karnataka and reimagine growth.

Key Pillars of Industrial Policy 2025-2030



Financial Incentives: Flexibility in incentives for investors between Capital Subsidy and

Production Linked Incentives



World Class Infra: Mechanisms for PPP collaboration for infrastructure development as

well as government support on dormitories and affordable housing for ultra mega

investments



Ease of Doing Business: Revamping the Single Window System with reforms on permits

required for setting up of Industries, simplification of the process for approvals



Human Capital: Collaboration platform for Industry, Govt. and Academia while also

offering Short-term and long-term curriculums for ITIs and polytechnics to ensure a

future-ready talent pipeline

Four Key Enablers for the Industrial Policy 2025-2030



Sustainability: Promotion of Green Industrial areas while also providing incentives for

green and sustainable initiatives undertaken by investors



Innovation: Make Karnataka a knowledge and innovation hub by strengthening the R&D

and Startup ecosystem and establishing KWIN (Knowledge, Wellbeing & Innovation) city

focused on Knowledge, Healthcare, Innovation and Research.



Inclusive Development: Bolster the MSME ecosystem in the supply chain through

infrastructure provision, incentivizing women's participation in the workforce and

cluster development in industrially backward regions



Governance: Seamless execution of the policy and monitoring at regular intervals for

transparency

5 Flexible and Competitive Financial Incentives

5.1 Base Subsidy for Large and Above Investments

The fiscal incentives are designed in accordance with the stakeholder discussions to ensure

simple yet flexible incentives under the policy. A base subsidy is offered with an option to

choose either a capital expenditure subsidy or Production Linked Incentives (PLI). The

advantage of the option can be taken by the industries based on their business models where

capital-intensive industries can choose capital subsidy, while high revenue-generating sectors

can choose PLI. Following are the incentives offered as Base Subsidy:

5.1.1 Capital Expenditure Subsidy for Large, Mega & Ultra Mega Enterprises

Capital expenditure subsidy is proposed as one of the options in Base Subsidy. The capital

subsidy option can act as a suitable base subsidy for capital-intensive industries. The quantum

of incentives is as per Table 5.

Zone 1

Zone 2

Zone 3

25% of Total Value of Fixed

Assets disbursed in 5 years

20% of Total Value of Fixed

Assets disbursed in 5 years

10% of Total Value of Fixed

Assets disbursed in 5 years only

for Bengaluru Rural

Table 5-Capital Expenditure Subsidy for Large, Mega and Ultra Mega Enterprises

The disbursement of the incentives will commence after the start of commercial production

and will be disbursed in 5 equal disbursements (adjusted for the phase of investments). The

classification of zones is attached in Annexure 6. Further, Financial Incentives for Zone 3 are

only limited to Bengaluru Rural. The definition of Value of Fixed Assets is provided in

Annexure-1.

5.1.2 Production-linked incentives for Large, Mega & Ultra Mega Enterprises

Production Linked Incentives (PLI) is proposed as the other option in Base Subsidy. The PLI

subsidy option can act as a suitable base subsidy` for high revenue-generating industries. The

quantum of incentives is as per Table 6.

Zone 1

Zone 2

Zone 3

2.5% of Net Sales Turnover for 7

years from Commercial

Production

2.0% of Net Sales Turnover for 7

years from Commercial

Production

1.0% of Net Sales Turnover for 7

years from Commercial

Production only for Bengaluru

Rural

Incentives Capped at 60% of VFA

Incentives Capped at 30% of VFA

Table 6- PLI Subsidy for Large, Mega and Ultra Mega Enterprises

Enterprises can avail production linked incentive to an extent of percentage of the turnover in

each financial year for a maximum period as above from the date of commercial production.

Such cumulative production linked incentive availed will be limited to either the period or VFA

limits whichever is reached earlier and no carry forward is permitted.

Net sales turnover is defined as the net sales generated from the facility corresponding to the

approved new investment (either new investment or expansion in the existing facility) in

SLSWCC/SHLCC. The Net sales turnover will be considered for both domestic sales and exports.

Domestic sales would include sales within the geographical territory of Karnataka and the

geographical territory of India.

Due to advancements in the Artificial Intelligence as well as industry focus on Automation to

increase productivity, the minimum employment thresholds have been rationalized. The

following table depicts the rationalized minimum employment threshold to avail the above

incentives:

Category

(INR Cr.)

Minimum Investment

(INR Cr.)

Minimum Employment

(# of people)

Large (50-300)

50% of Actual Investment Amount in INR

Crore

Minimum Employment:

25 - 500

Mega (300-1000)

300

Ultra Mega (1000+)

1000

500+

(Additional 6 jobs per 50 Cr)

Table 7- Minimum Employment Threshold for New investments

NOTE: Additional incentives for the Taluks as categorized by Dr. D.M. Nanjundappa

Committee Report as below:

 Capital Expenditure Subsidy – Additional 5% of total value of fixed assets for most

backward taluks and additional 3% of total value of fixed assets for more backward

taluks.

 Production linked incentives – Additional 5% of incentives capped for most backward

taluks and additional 3% of incentives capped for more backward taluks.

5.2 Booster Subsidy for Large and Above Investments

Various Booster subsidies are provided to investors depending on the green and sustainability

initiatives undertaken, employment generated, and women's participation in the workforce as

well as co-location of R&D and Manufacturing investments by an entity in Karnataka. These

boosters have been provided over the base subsidy. In case PLI is chosen as the base subsidy,

the total increase in VFA cap would not be higher than 5% irrespective of the number of

boosters applicable for the investment.

5.2.1 Employment Booster for Large, Mega & Ultra Mega Enterprises

Industries providing extra employment shall get additional incentives as below:

Slab 1

Slab 2

Slab 3

Employment Slabs (x: Multiple of

Minimum Employment)

3x-4x

4x-5x

>5x

Booster on Incentive opted (additional

incentive on Capital Subsidy/ PLI

eligible incentive amount)

7.5%

10%

15%

The absolute increase in VFA limit in

case of PLI chosen as base subsidy

Table 8-Employment Booster for Large, Mega and Ultra Mega Enterprises

The following table depicts the Exhibit of Employment Booster Subsidy Calculations:

Investment

Value

Investment Amount (INR Cr.)

800

Location of Investment

Zone 2

Fixed Asset to Turnover Ratio (FATR)

125%

Employment Generated

1400

Category of Investment

Mega

Base Subsidy Opted by Investor

Capex Subsidy

Base Subsidy (Capex Subsidy)

20% of Value of Fixed Assets disbursed in 5 years

after commercial production

Minimum Employment Threshold

800 X 0.5 = 400

Employment Slab

1400 / 400 = 3.5: Slab 1

Employment Booster applicable

7.5%

Total Subsidy (Capex Subsidy)

20% X (1 + 0.075) = 21.5% of Value of Fixed Assets

disbursed in 5 years

Table 9- Exhibit Calculation of Employment Booster Subsidy

5.2.2 Women's Participation in the Workforce for Large, Mega & Ultra Mega

Enterprises

The inclusion of women in the workforce is a critical component of Karnataka's Industrial

Policy, aiming to leverage the full potential of its human resources to drive economic growth

and innovation. Recognizing the importance of gender diversity, the state's initiatives seek to

create an inclusive environment that supports women's participation across various industrial

sectors. This approach not only enhances productivity but also promotes a more equitable

distribution of economic benefits. By implementing policies that encourage the employment of

women, Karnataka is addressing skill shortages and tapping into a wider talent pool, which is

vital for sustaining its competitive edge in both national and global markets. Such measures

are expected to contribute significantly to the state's social and economic objectives, making

it a model for gender inclusiveness in industrial development.

The following table depicts the booster on incentives basis percentage of women in the

workforce:

Slab 1

Slab 2

Slab 3

Percentage of Women in the

Workforce

50%+

60%+

70%+

Booster on Incentive opted (additional

incentive on capital subsidy/PLI

eligible incentive amount)

7.5%

10%

15%

Table 10-Women Participation Booster for Large, Mega and Ultra Mega Enterprises

The following table depicts the Exhibit of Women Participation Booster Subsidy Calculations:

Investment

Value

Investment Amount (INR Cr.)

800

Location of Investment

Zone 2

Fixed Asset to Turnover Ratio (FATR)

150%

Employment Generated

800

Category of Investment

Mega

Base Subsidy Opted by Investor

PLI Subsidy

Base Subsidy (PLI Subsidy)

2.0% of Net Sales Turnover for a period of 6 years

after Commercial Production

Percentage of women in the workforce

65%

Women Participation Slab

Slab 2

Women Participation Booster applicable

10%

Total Subsidy (PLI Subsidy)

2.0% X (1 + 0.01) = 2.2% of Net sales Turnover for

a period of 6 years after Commercial Production

Table 11- Exhibit Calculation of Women Participation Booster Subsidy

5.2.3 Booster for co-location of R&D and manufacturing units of Large, Mega &

Ultra Mega Enterprises

To leverage Karnataka's established R&D ecosystem and attract high-value manufacturing

investments, the state has introduced a booster for companies establishing both R&D and

manufacturing operations in Karnataka. This initiative aims to encourage companies with

existing or planned R&D facilities in the state to expand their footprint by adding

manufacturing units, thereby benefiting from enhanced incentives on their manufacturing

investments.

All large, mega, and ultra mega enterprises that are setting up a manufacturing unit and either

have an existing R&D facility or are planning to set up one would be eligible for the following

booster incentive:

Booster

Booster on

incentive opted

Absolute increase in VFA limit in

case PLI is chosen as base subsidy

Capital Subsidy on Manufacturing

10%

Production-Linked Incentive (PLI) on

Manufacturing

10%

Additional Incentives on R&D

5.3 Additional Support to Large, Mega & Ultra Mega Enterprises

Following support will be continued from the Industrial Policy 2020-25 for Large and above

investment categories:

Support

Details

Exemption from

Stamp Duty

Stamp duty to be paid in respect of loan agreements, credit deeds,

mortgage and hypothecation deeds executed for availing loans from

State Government including VAT/SGST loan from Department and/or

State Financial Corporations, Industrial Investment Development

Corporations, National Level Financial Institutions, Commercial Banks,

Regional Rural Banks, Co-operative Banks and other institutions which

may be notified by the Government from time to time for the initial

period of five years only and for lease deeds, lease-cum-sale, sub-

lease and absolute sale deeds executed by industrial enterprises in

respect of industrial plots, sheds, industrial tenements by Karnataka

Industrial Areas Development Board, KSIIDC, KEONICS, Industrial Co-

operatives, approved private industrial estates/parks, food parks, SPV

formed by GoK/GoI and other approved industrial parks shall be

exempted as below:

Zone 1: 100%

Zone 2: 75%

Zone 3: Nil

Stamp Duty exemption on working capital loan arrangements can be

only claimed till 3 years from the start of commercial production.

Concessional

Registration Charges

Zones 1 and 2: INR 1/- per INR 1000/-

Zone 3: Nil

Note:

The exemption of stamp duty and concessional registration

charges are also applicable to lands purchased under Section

109 of the KLR Act, 1961 for the projects approved by

SLSWCC/SHLCC. This incentive will also be applicable for the

land transferred by KIADB to landowners as compensation for

the acquired land.

ii.

The exemption of stamp duty and concessional registration

charges are also available for registration of final sale deed in

respect of lands, sheds, plots, and industrial tenements after

the expiry of the lease period at the rate as specified in the

Industrial Policy which was in force at the time of execution of

lease-cum-sale deed.

iii. CETP/Industrial Hazardous waste disposal projects set up by

private investors to support these industries will be eligible for

100% exemption from stamp duty and concessional registration

charges of INR 1/- per INR 1,000/- in all zones.

iv.

Lands transferred by KIADB to KSSIDC for the development of

industrial estates will be eligible for 100% exemption from

stamp duty and concessional registration charges of INR 1/-

per INR 1,000/- in all zones.

100% reimbursement of stamp duty shall be provided in Lieu of

100% exemption of Stamp Duty till such time an amendment is

made in the Karnataka Stamp Act. However, Enterprises can

avail stamp duty exemption and concessional registration

charges as per Karnataka Industrial Policy 2020-25 till such

time an amendment is made to the Karnataka Stamp Act in all

Zones.

Reimbursement of

Land Conversion

Fee

Zone 1: 100%

Zone 2: 100%

Zone 3: Nil

Table 12-Additional Support for Large, Mega and Ultra Mega Enterprises

5.4 Fiscal incentives for logistics and warehousing

The logistics and warehousing companies will be eligible for these fiscal incentives subject to

the minimum investment and minimum area conditions as mentioned in the definitions as per

Annexure-1.

Sl. No Incentive Head

Quantum

Capital subsidy

(% of the

eligible fixed

capital

investment)

The minimum area and minimum investment for the different

logistics and warehousing facilities to get incentives and concessions

are as below:

Logistics and

warehousing facility

Minimum

area

Minimum

investment

(in Rs. Cr)

Warehouse

Inside industrial area

20,000 sq. ft

Outside industrial

area

70,000 sq. ft

Logistics Park

Large Logistics Park

20 acres

100

Mega Logistics Park

100 acres

350

Cold storages

10,000 sq. ft

1.5

Truck terminal

5 acres

7.5

The above logistics and warehousing facilities can avail capital

subsidy under Micro, Small, Medium, Large and Mega Enterprises as

applicable.

Note:

Fixed Capital Investment is a total investment made on land, building

and plant & machinery including R&D equipment and other productive

assets like tools, jigs & fixtures, dyes, utilities like DG Sets, cranes,

material handling equipment and such other equipment directly

related to commercial operations.

2) Capital subsidy will be given in five equal installments from the year of

commercial operations.

3) Other incentives and concessions are as per Industrial Policy 2025-30.

4) Above logistics and warehousing facility will be excluded from incentives

in Bengaluru Urban in Zone-3.

Table 13- Fiscal incentives for logistics and warehousing projects

5.5 Affordable Industrial Dormitory Subsidy

Incentives are also provided for the construction of dormitories for Ultra Mega Investors. The

amount will depend on the option chosen by an investor in Base Subsidy. Following are the

incentives to be provided for Housing/Dormitory.

Capex Subsidy

PLI

Same capex subsidy under Base Subsidy

extended on construction cost with a limit of

INR

Crore

per

1,000

people’s

accommodation

One-time subsidy up to a limit of INR 1 Crore

per 1,000 people’s accommodation

Table 14- Subsidy for Industrial Dormitory Construction for Ultra Mega Industries

The conditions set for availing of the Industrial Dormitory incentives are as follows:

1. The Industrial Dormitory ownership should be with the same entity as the entity doing

the manufacturing investment

2. The ownership of the land on which the Industrial Dormitory should be with the same

entity as the entity doing manufacturing investment

3. The location of the Industrial Dormitory should be within the same or different KIADB

Industrial Area <5 km from the location of the manufacturing investment

4. The Industrial dormitory subsidy will be disbursed after due verifications on the number

of people availing of the accommodation facility in the industrial dormitory

5.6 Sustainability Linked Incentives

Incorporating sustainability-linked incentives into the new industrial policy of Karnataka is

crucial for fostering a resilient and future-ready industrial sector. These incentives will drive

industries to adopt eco-friendly practices, reduce carbon footprints, and enhance resource

efficiency. By prioritizing sustainable development, Karnataka can attract forward-thinking

investors, create green jobs, and ensure long-term economic growth without compromising

environmental integrity. This strategic approach will not only address the pressing challenges

of climate change but also position Karnataka as a leader in sustainable industrialization,

ensuring that its growth is inclusive, responsible, and aligned with global sustainability goals.

The following table depicts mandatory activities for the small and above category of

investments.

Category

Mandatory Activities

Investment type

Rain Water

Harvesting

Mandatory for Building structures

Small and above

investments

Water Body

Restoration

Projects

Water Body Restoration (water bodies like

Lake, Ponds, and Borewells) wherever

possible within the plot in the Industrial Area

Medium and above

investments

Table 15- List of Mandatory activities for eligibility of Sustainability linked incentives

The following initiatives will be eligible for Sustainability Linked Incentives for Large and above

investments. Capital expenditure / operational expenditure under the following initiatives will

not be considered under calculations of the Value of Fixed Assets for Base Subsidy.

Initiatives

Incentives (Capped at 10% of Value of Fixed Assets)

Environmental

Infrastructure

Facilities

a) ETPs

50% of cost of equipment up to INR 2.50 Cr

b) CETPs, Waste Management

Projects,

Industrial

Hazardous Waste Disposal

Projects)

50% of cost of equipment up to INR 5.00 Cr

Zero Liquid Discharge

50% of cost of equipment up to INR 1 Cr

Air Pollution Control Measures

(Electrostatic

Precipitators,

Bag House Filters, Scrubbers,

SCR system)

50% of cost of equipment up to INR 1 Cr

Energy

Efficiency

Measures

(High-Efficiency

Lighting

LEDs, Use of high-efficiency

motors

through

Variable

Frequency Drives, Installation

Continuous

Energy

Monitoring Systems (CEMS) and

Continuous

Air

Quality

Monitoring

Systems

(CAMS),

etc)

50% of certification costs up to INR 1 Cr

Electrification

Low-

Temperature

Thermal

Processes as well as Energy

Backups (to Li-ion BESS)

50% of cost of equipment up to INR 1 Cr

Conversion

Passenger

Vehicles and Utility Vehicles

exclusively used in Industrial

Areas to EV

Subsidy of 10% of cost up to a total of INR 20 Lakh

Other Emerging Green

Technology Areas

Case-to-case basis

Table 16- Sustainability initiatives linked incentives for large and above investments

The following initiatives will be eligible for Sustainability Linked Incentives for MSME

investments. Capital expenditure / operational expenditure under the following initiatives will

not be considered under calculations of the Value of Fixed Assets for Base Subsidy.

Initiatives

Incentives (Capped at 10% of Value of Fixed Assets)

Environmental Infrastructure

Facilities (Eg: ETPs, CETPs

Waste Management Projects)

50% of cost of equipment up to INR 50 Lakh

Zero Liquid Discharge

50% of cost of equipment up to INR 50 Lakh

Air Pollution Control Measures

(Electrostatic

Precipitators,

Baghouse Filters, Scrubbers,

SCR system)

50% of cost of equipment up to INR 50 Lakh

Energy

Efficiency

Measures

(High-Efficiency

Lighting

LEDs, Use of high-efficiency

motors

through

Variable

Frequency Drives, Installation

Continuous

Energy

Monitoring Systems (CEMS) and

Continuous

Air

Quality

Monitoring

Systems

(CAMS),

etc)

50% of certification costs up to INR 50 Lakh

Electrification

Low-

Temperature

Thermal

Processes as well as Energy

Backups (to Li-ion BESS)

50% of cost of equipment up to INR 50lakh

Conversion

Passenger

Vehicles and Utility Vehicles

exclusively used in Industrial

Areas to EV

Subsidy of 10% of cost up to a total of INR 10 Lakh

Other

Emerging

Green

Technology Areas

Case-to-case basis

Table 17- Sustainability initiatives linked incentives for MSME investments

A detailed list of initiatives to be covered in the Sustainability Linked Incentives is listed in

Annexure 2.

Further, as per the MOU signed by KSPCB with the CII-GreenCo Rating system, investors can

avail of awards and special case discounts for enrolling in the Green Co Rating Program through

KSPCB

Awards

(INR Cr)

MSME

Large CI

(INR 10 Cr

– INR 50

Cr)

Large CI

(INR 50 Cr

– INR 100

Cr)

Large CI

(INR 100

Cr – INR

250 Cr)

Large CI

(INR 250

Cr – INR

1000 Cr)

Large CI

(>INR 1000

Cr)

Rating

Platinum

50,000

3,00,000

4,00,000

5,00,000

7,50,000

10,00,000

Gold

2,00,000

2,50,000

3,00,000

5,00,000

7,50,000

Silver

1,50,000

2,00,000

2,50,000

5,00,000

Bronze

75,000

1,00,000

1,50,000

2,50,000

Table 18- Sustainability Outcome Linked Incentives in INR basis KSPCB-CII Green Co Rating Program

Note:

Capital Investment (CI) shall be as defined in Rule 32 of Karnataka Water Rules and the

Size of the industry shall be as per KSPCB norms.

II.

The GreenCo rating incentive scheme is operational from the financial year 2023-24.

III.

The procedure and guidelines for availing of the incentives will be published by the

Karnataka State Pollution Control Board separately.

IV.

Incentives and awards through the GreenCo Rating Program will be administered by

the Karnataka State Pollution Control Board

2. Annual recognition for best 3 units in each category as above will be given annual awards at

State Level function to be organized by the State Board and State Government.

3. Exclusive mention of GreenCo-rated companies on the website of KSPCB: The Board will

prominently feature all the GreenCo-rated companies in the State with their unique features

on the KSPCB website to provide them publicity and recognition

Additionally, the Industrial Policy aims to provide additional incentives on base subsidy to

companies who have certification with GreenCo to encourage companies to adopt sustainable

processes. The incentives are to be provided as follows:

Rating

categories

Large

(INR 50Cr – INR 300Cr)

Mega

(INR 300Cr – INR 1000Cr)

Ultra Mega

(INR 1000Cr+)

Platinum and

above

12.5%

10%

Gold

10%

7.5%

Silver

7.5%

Bronze

3.5%

Certified

50% on the cost of the application

Table 19- Incentives for Large and above Investments

The Industrial Policy 2025-30 currently offers incentives for the GreenCo rating system, and

the Government of Karnataka may, in the future, extend similar incentives to other emerging

rating systems after careful evaluation. Additionally, the government may develop its own

rating system to classify companies based on their commitment to and implementation of

sustainable practices, to incentivize such efforts.

The Policy also aims to promote the establishment of facilities for recycling plastic, e-waste

and biomedical waste. The following incentives are proposed for the same:

Type of support

Incentive to all Enterprises

Encouragement

for

recycling facilities (plastic,

e-waste

and

biomedical

waste) and waste to energy

generation facilities

One-time capital subsidy of up to 50% of the cost of the

facility for all zones subject to a ceiling of INR 5Cr

Table 20- Incentives for recycling facilities

5.7 Financial Incentives for MSME Enterprises

MSME enterprises form the backbone of the industrial ecosystem and hence it is important to

provide robust support to MSMEs in the form of financial incentives.

Support

Details

Capital Subsidy for

Micro Industries

General

Special Category

(SC/ST,

Women,

Minorities,

Physically Challenged and Ex-

Servicemen)

Zone 1: 30% of VFA (max of INR

30 Lakh)

Zone 2: 25% of VFA (max of INR

25 Lakh)

Zone 3: 10% of VFA (max of INR

10 Lakh) (only Bengaluru Rural)

VFA – Value of Fixed Assets

Zone 1: 35% of VFA (max of INR

35 Lakh)

Zone 2: 30% of VFA (max of INR

30 Lakh)

Zone 3: 15% of VFA (max of INR

15 Lakh) (only Bengaluru Rural)

VFA – Value of Fixed Assets

Capital Subsidy on

for Small Industries

General

Special Category

(SC/ST, Women, Minorities,

Physically Challenged and Ex-

Servicemen)

Zone 1: 25% of VFA (max of INR

200 Lakh)

Zone 2: 20% of VFA (max of INR

150 Lakh)

Zone 3: 10% of VFA (max of INR

50 Lakh) (only Bengaluru Rural)

VFA – Value of Fixed Assets

Zone 1: 30% of VFA (max of INR

225 Lakh)

Zone 2: 25% of VFA (max of INR

175 Lakh)

Zone 3: 15% of VFA (max of INR

75 Lakh) (only Bengaluru Rural)

VFA – Value of Fixed Assets

Note on Subsidy for

Micro and Small

Enterprises

The capital subsidy will be disbursed in 2 installments.

Table 21- Incentives for Micro and Small Enterprises

Support

Details

Capital Subsidy

Production linked incentive

Base Subsidy for

Medium Industries

The choice between

Capital Subsidy and

Production Linked

Incentives

Capital Subsidy after commercial

production disbursed in 4 annual

and equal disbursements

Zone 1: 25% of VFA (max of INR

10 Cr.)

Zone 2: 20% of VFA (max of INR 8

Cr.)

Zone 3: 10% of VFA (max of INR 4

Cr.) (only for Bengaluru Rural)

VFA – Value of Fixed Assets

Production Linked Incentives for 7

years

Zone 1: 2.5% of net sales turnover

(capped at 60% of VFA)

Zone 2: 2.0% of net sales turnover

(capped at 60% of VFA)

Zone 3: 1.0% of net sales turnover

(capped at 30% of VFA) (only

Bengaluru Rural)

VFA – Value of Fixed Assets

Note:

Medium Enterprises can avail production linked incentive to an extent of percentage of the

turnover in each financial year for a maximum period as above from the date of commercial

production. Such cumulative production linked incentive availed will be limited to either the

period or VFA limits whichever is reached earlier and no carry forward is permitted.

NOTE: Additional incentives for the Taluks as categorized by Dr. D.M. Nanjundappa

Committee Report as below:

 Capital Subsidy for Micro Industries – Additional 5% of total value of fixed assets (Maximum

of Rs. 5 lakh) for most backward taluks and additional 3% of total value of fixed assets

(Maximum of Rs. 3 lakh) for more backward taluks.

 Capital Subsidy for Small Industries – Additional 5% of total value of fixed assets (Maximum

of Rs. 10 lakh) for most backward taluks and additional 3% of total value of fixed assets

(Maximum of Rs. 5 lakh) for more backward taluks.

 Capital Subsidy for Medium Industries – Additional 5% of total value of fixed assets

(Maximum of Rs. 50 lakh) for most backward taluks and additional 3% of total value of fixed

assets (Maximum of Rs. 25 lakh) for more backward taluks.

 Production linked incentives for Medium Industries – Additional 5% of incentives capped for

most backward taluks and additional 3% of incentives capped for more backward taluks.

Additional support to MSMEs

General

Special Category

(SC/ST, Women, Minorities,

Physically Challenged and Ex-

Servicemen)

Exemption of Stamp

Duty for MSMEs

Stamp duty to be paid in respect of loan agreements, credit deeds,

mortgage and hypothecation deeds executed for availing loans from

State Financial Corporation, National Level Financial Institutions,

Commercial Banks, Regional Rural Banks, Co-operative Banks, Khadi

and Village Industries Board, Khadi and Village Industries Commission,

Karnataka State SC/ST Development Corporation, Karnataka State

Minority Development Corporation and other institutions which may

be notified by the Government from time to time for the initial period

of five years only and for lease deeds, lease-cum-sale, sub-lease,

transfer of leasehold rights and absolute sale deeds executed by

industrial enterprises in respect of industrial plots, sheds, industrial

tenements,

flatted

factories

Karnataka

Industrial

Areas

Development

Board,

Karnataka

State

Small

scale

Industries

Development

Corporation,

KEONICS,

Industrial

Co-operatives,

approved private industrial estates/parks, food parks, SPV formed by

GoK/GoI and other approved industrial parks shall be exempted as

below:

Zone 1: 100%

Zone 2: 100%

Zone 3: Nil

Zone 1: 100%

Zone 2: 100%

Zone 3: 75%

Stamp Duty on working capital loan arrangements can be only claimed

till 3 years from the start of commercial production:

Concessional

Registration Charges

for MSMEs

Zones 1 and 2: INR 1/- per INR

1000/-

Zone 3: Nil

Zones 1, 2 and 3: INR 1/- per INR

1000/-

Note:

The exemption of stamp duty and concessional registration charges

are also applicable to lands purchased under Section 109 of the KLR

Act, 1961 for the projects approved by SLSWCC/DLSWCC. This

incentive will also be applicable for the land transferred by KIADB to

landowners as compensation for the acquired land.

ii.

The exemption of stamp duty and concessional registration charges

are also available for registration of final sale deed in respect of

lands, sheds, plots, and industrial tenements after the expiry of the

lease period at the rate as specified in the Industrial Policy which

was in force at the time of execution of lease-cum-sale deed.

iii.

CETP/Industrial Hazardous waste disposal projects set up by private

investors to support these industries will be eligible for 100%

exemption from stamp duty and concessional registration charges of

INR 1/- per INR 1,000/- in all zones.

iv.

100% reimbursement of stamp duty shall be provided in Lieu of 100%

exemption of Stamp Duty till such time an amendment is made in

the Karnataka Stamp Act. However, Enterprises can avail stamp duty

exemption and concessional registration charges as per Karnataka

Industrial Policy 2020-25 till such time an amendment is made to the

Karnataka Stamp Act in all Zones.

Reimbursement of

Land Conversion

Fee after

commercial

production for

MSMEs

Zone 1: 100%

Zone 2: 100%

Zone 3: Nil

Zone 1: 100%

Zone 2: 100%

Zone 3: 75%

Exemption from Tax

on Electricity Tariff

for MSMEs

Zone 1: 100% for 7 years

Zone 2: 100% for 6 years

Zone 3: Nil

Zone 1: 100% for 8 years

Zone 2: 100% for 7 years

Zone 3: 100% for 4 years

Power Subsidy for

Micro

and

Small

Enterprises

For Zone 1 & 2 only

Reimbursement of cost of power paid at INR 1.00/- per unit consumed

for a period of 3 years.

Table 22 – Additional Support for MSME Enterprises

Further, MSMEs can avail of Quality Certification Incentives and the following list of quality

certifications are eligible for the Quality Certification incentives.

Quality Certification

Incentives (50% of the cost of application)

(Total Capping at INR 5,00,000 per entity)

International Organization

for Standardization (ISO)

50% of the cost of the application

Bureau of Indian Standards

(BIS)

FSSAI – AGMARK

ECOMARK

Zero Defect Zero Effect

(ZED)

Indian Standards Institution

(ISI)

Fruit Products Order (FPO)

Bureau of Energy Efficiency

(BEE)

Any other international

quality certification

recognized in India by a

competent authority

Table 23- Quality Certification Support for MSMEs

Additionally, to promote the export readiness of MSMEs, the following certifications will be

supported by the Government of Karnataka. This will help MSMEs achieve the necessary

standards and qualities to be qualified for exports.

Table 24- Export Readiness Certification Support for MSMEs

5.8 Support to Healthcare Enterprises

Healthcare enterprises form a critical part of the civic amenities required to create a thriving

industrial ecosystem. Eligible healthcare enterprises can be defined as hospitals with

diagnostic labs set up over at least 1 acre in Industrial Area/estate and having at least 50 beds.

Ayurvedic hospitals shall not be eligible for incentives. Thus, the Policy aims to incentivize the

same as follows:

Export Certification

Incentives (50% of the cost of application)

(Total Capping at INR 5,00,000 per entity)

Conformity European (CE

Certification)

50% of the cost of the application

China Compulsory

Certification (CCC)

Phyto-sanitary

certificates

International Featured

Standards, British Retail

Consortium, Food Safety

Standard Certification

(IFS-BRC-FSSC 220000)

Supplier Ethical Data

Exchange (SEDEX)

Good Hygiene Practices

(GHP)

Good Manufacturing

Practices (GMP)

Good Laboratory Practices

(GLP)

Hazard Analysis and

Critical Control Point

(HACCP)

Any other international

quality certification

recognized in India by a

competent authority

Support

Details

Promotion of

establishment of

healthcare

enterprises in

industrial parks

Reimbursement from stamp duty

Stamp duty to be paid in respect of loan agreements, credit deeds,

mortgage and hypothecation deeds executed for availing loans from

State Financial Corporations, Industrial Investment Development

Corporations, National Level Financial Institutions, Commercial Banks,

Regional Rural Banks, Co-operative Banks, and other institutions

which may be notified by the Government from time to time for the

initial period of five years only and for lease deeds, lease-cum-sale,

sub-lease and absolute sale deeds executed by industrial enterprises

in respect of industrial plots, sheds, industrial tenements by

Karnataka Industrial Areas Development Board.

Table 25- Incentives for healthcare enterprises and facilities

5.9 Eligibility for Customized Incentive Package

Investments greater than INR 1,000 Cr will be eligible for a customized incentive package on a

case-to-case basis depending on the strategic nature of the investment and the employment

generation potential of the investment. The state will also consider investments in new and

sunrise sectors on a case-to-case basis and may provide a customized incentive package

tailored to the specific needs and strategic importance of such investments.

6 Enabling World-Class Industrial Infrastructure

6.1 Involvement of Private Players for Infrastructure Development:

Infrastructure is one of the key requirements of the investors in deciding for location of

investment. Along with connectivity in the state in the form of Roads, Railways, and Airports,

it is equally important for the investors to have confidence in the trunk infrastructure in the

industrial areas like internal roads, power supply, water supply, natural gas supply, etc.

In the new industrial policy of Karnataka, a strategic focus is placed on developing world-class

infrastructure to catalyze robust industrial growth and enhance economic competitiveness. To

achieve this, the policy proposes the implementation of the Public-Private Partnership (PPP)

model for the development of private industrial areas. This initiative aims to leverage private

expertise and resources, ensuring the rapid construction and management of sophisticated

industrial zones. Furthermore, the policy introduces the concept of Ready Built Factories

(RBFs), which are encouraged to be developed by private players. As part of the policy, it will

provide a provision for the Government Authority - Karnataka Industrial Area Development

Board (KIADB) to get into a Special Purpose Vehicle arrangement with private players with

<25% equity stake provided in the form of land. These facilities will be modern, plug-and-play

structures that reduce the time and capital investment required for new enterprises to

commence operations. This will also help KIADB to focus on enlarging the land bank by

dedicated efforts on land acquisition and water/power infrastructure.

Further, private player involvement in creating world-class infrastructure will become a key

booster for infrastructure availability for future industrial growth in Karnataka. Hence, the

following incentives and concessions for Private Industrial Parks are provided to encourage

Private Industrial Parks.

Support

For all categories

Capital Subsidy

disbursed in 3 years

across equal

disbursements

10% of the Value of Fixed Assets on building and infrastructure

facilities in all Zones (Value of Fixed Assets includes investment

in preparation of land, laying of infrastructure for utilities

(water, power, gas) and roads)

Exemption of Stamp

Duty and Concessional

Registration Charges

Stamp Duty to be paid shall be exempted and concessional

registration charges rate of INR 1/- per INR 1,000/- in respect of

loan agreements and for lease deeds, lease-cum-sale deeds,

absolute sale deeds executed by the Developer in respect of

lands purchased for development of private industrial parks in all

Zones.

Provision for SPV in

Private Industrial Park

Creation

Government will facilitate KIADB with a provision to enter into a

Special Purpose Vehicle with <25% equity stake in the form of raw

land for the development of industrial areas in PPP mode as

mentioned in Section 6.1 through transparent process.

Table 26- Support for Private Industrial Park and Infrastructure Development

Support for Private industrial parks will be eligible based on the following table on the

minimum extent developed. The project can be either in PPP mode or private development

and must be approved under SLSWCC/SHLCC.

Category of Infrastructure

Minimum Extent (Acres)

Knowledge-Based Industries / Flatted Factories

Logistics

Multi/Sector Specific Industrial Parks

Integrated Industrial Parks

200

Table 27 - Minimum extent of Private Industrial Park Development for Incentives

6.2 Support on Industrial Dormitory Construction by Investors:

In addition to these infrastructural developments, the policy also recognizes the importance of

supporting the workforce directly. It proposes the construction of dormitories by private

entities to provide affordable and convenient living options for factory workers. The

government will support these efforts through subsidies, making it financially viable for private

players to invest in these critical accommodations. The fiscal incentives for support on

dormitory construction by Ultra Mega Investors are described in Section 5.5.

6.3 Support on creation of Common Facility Centres:

Further, it is proposed to create Common Facility Centres (CFC) in key industrial areas and

strategic sectors to provide infrastructure to upcoming startups and MSMEs to utilize the

facilities and get embedded into the supply chain ecosystem of large investors. A CFC would

serve as an infrastructure support in terms of quality testing and prototype development.

Following are the benefits envisioned through CFCs in Karnataka.



Cost Efficiency: CFCs reduce the capital expenditure for individual businesses by

providing access to expensive machinery, equipment, and technology on a shared basis.

This allows SMEs to utilize advanced tools without bearing the full cost.



Access to Advanced Technology: They provide SMEs access to state-of-the-art

technology and facilities that they might not afford individually. This access helps

businesses improve their production quality, increase efficiency, and stay competitive.



Skill Development: CFCs often include training facilities that help workers and

entrepreneurs upgrade their skills. This can lead to improved productivity and

innovation within the industry.



Quality Improvement: With access to better facilities and equipment, businesses can

enhance the quality of their products, which can help them meet international

standards and increase their marketability.



Research and Development: CFCs can serve as hubs for R&D activities, enabling

businesses to develop new products and processes. This collaborative environment

fosters innovation and technological advancements.



Enhanced Competitiveness: By reducing costs and improving product quality and

innovation, CFCs help SMEs become more competitive both in domestic and

international markets.



Collaborative Environment: CFCs foster a collaborative environment where businesses

can share knowledge, best practices, and innovations. This networking can lead to new

business opportunities and partnerships.



Support Services: These centers often provide various support services, such as testing,

quality control, and certification, which are essential for maintaining product standards

and accessing new markets.



Sustainability: By sharing resources, CFCs promote sustainable practices, reducing

waste and energy consumption compared to individual businesses operating in isolation.

Hence, it is encouraged for private participation in the establishment of CFCs, and government

support in the creation of CFCs will be discussed on a case-by-case basis.

6.4 Infrastructure support for Waste Management

Waste management is a critical responsibility of the Karnataka State Government, driven by

both constitutional and statutory mandates. Sanitation, including waste management, is listed

under List II of the Seventh Schedule of the Indian Constitution, making it a prerogative of the

State. The Plastic Waste Management Rules, 2016, and subsequent amendments emphasize the

role of State authorities in implementing effective plastic waste management strategies. These

rules mandate the State to ensure that plastic waste is collected, stored, transported, and

disposed of in an environmentally sound manner, involving various stakeholders such as waste

pickers, recyclers, and processors.

The concept of Extended Producer Responsibility (EPR) outlined in these rules further

reinforces the State's mandate. EPR requires producers, importers, and brand owners to

manage the plastic packaging waste they generate, ensuring a comprehensive approach to

plastic waste management. The amendments introduced in 2021 and 2022 expand these

responsibilities, mandating strict compliance and providing frameworks for the collection and

recycling of plastic waste. The State's role is crucial in enforcing these guidelines and ensuring

that entities comply with their EPR obligations, thus reducing the environmental impact of

plastic waste.

There currently exists a severe mismatch in the plastic waste produced within the State every

month and the capacity of existing registered units to process this waste. Therefore, there is a

need to boost this sector to increase processing capacity.

The inclusion of plastic waste management in Karnataka's industrial policy is essential to

address these environmental concerns and align with national goals for sustainable

development and sanitation. By adopting and enforcing these regulations, Karnataka can lead

the way in sustainable industrial growth while protecting its natural resources and public

health. This commitment promotes a cleaner, healthier environment for all residents of the

State.

In recognition of the above, the State Government proposes the following measures:

In existing and upcoming Industrial Areas / Estates, an area of at least 1 acre and up to 5

acres shall be set aside for the setting up of Solid Waste Processing units. This land shall

form part of the area set aside for civic amenities within these Industrial Areas / Estates.

Collectively, these initiatives are designed to attract substantial investment, improve

operational efficiencies, and enhance the quality of life for the workforce, thereby positioning

Karnataka as a leading destination for industrial innovation and growth.

6.5 Special Investment Region

“Karnataka Special Investment Region Act, 2022” was notified on 12.01.2023 for the

establishment, operation, control and management of mega industrial regions and for

establishment of industrial areas in the State and Karnataka Special Investment Region Rules,

2023 was also notified. The Government will declare Investment Region or Industrial Area and

designate them as Special Investment Region under the provisions of this Act.

By giving SIR status, the Government proposes to develop the investment region /industrial

area as global hubs of economic activity supported by world class infrastructure, premium civic

amenities, centers of excellence and proactive policy framework.

6.6 Enhanced FAR guidelines

Building regulations have locked up substantial factory land and restricted the ability of

enterprises to allocate captial to the most productive use. Changes in buliding regualtions can

lead to a significant reduction in cost of doing businesses and increase in job opportunities.

Reforms will be undertaken as in KIADB building regulations to maximize land use efficiency

and a higher Floor Area Ratio (FAR) both in Urban & Rural areas / local authorities.

7 Revamping Single Window System for Ease of

Doing Business

The State Government has undertaken various initiatives as part of the Ease of Doing Business

reforms in the State. Karnataka was the first state to bring out the Karnataka Industries

(Facilitation) Act, 2002, and to constitute the Single Window Clearance Mechanism at the

District level and State level for approvals of all Investment proposals. This has helped the

Government in simplifying the procedures and fast-tracking the approvals. Additionally,

Karnataka Udyog Mitra (KUM), under the aegis of the Department of Commerce & Industries is

functioning towards facilitating investments and promoting businesses in the State. KUM’s role

is to handhold investment proposals from new and existing investors through the entire

investorjourney, right from receiving the initial investment application to the eventual

implementation of the project.

To facilitate Ease of Doing Business, Karnataka has put in place a technology-based Single

Window Clearance platform called e-Udyami. The purpose of this system was to improve

transparency and turnaround times for Investors looking to invest in the State. The

Government has now engaged the Services of a global technology giant to revamp the current

Single Window Clearance system. The objective of this revamp is not only to address the

known gaps & constraints of the current system but also to provide the Investors in the State,

with a truly state-of-the-art and modern digital system that supports all facets of their

investment journey with the State.

The State’s journey of reimagining the new Single Window system has not only factored

feedback from Investors and Industry associations but also extensively benchmarked the

features and functionalities offered by similar systems both nationally and internationally.

The new Single Window System will facilitate ease of doing business for Investors by providing

a comprehensive set of features and functionalities:



Common Application Form (CAF) based on in-principle approval for Investors at District

or State level



Accelerate time-to-operations for Investors through an Affidavit Clearance (ABC) from

Karnataka Udyog Mitra for initial approvals to initiate construction and other

preparatory activities



Application, amendment, and renewal of over 130+ business services across 30+

departments at the State level and also 45 district-level services without having to

leave the Portal



Appropriate integrations with the National Single-Window system &another Central

agency system for seamless access



Wizard-based discovery of approvals & clearances required



Incentive calculators to facilitate informed decision-making



A multi-lingual, Generative-AI Chatbot to help Investors get all the relevant information

related to policies, incentives, approvals, and compliances



Improved Investor experience through simplification of forms, elimination of

information duplication, visibility on the application status at every stage, and event-

based triggers/alerts



Fully functional Incentive claim and disbursement module



Dashboard-based operational visibility, SLA compliance & threshold-based escalations

for government stakeholders at different levels for service delivery assurance and

oversight



Support for a multi-lingual and mobile-friendly site



Query and grievance address for the Investors

In addition to the above-mentioned features of the Single Window Clearance system, the State

Government is committed to enhancing the overall Investor experience and turnaround times

through the adoption of measures like:

1. SLA-based service delivery

All the requisite business services needed by existing/new Investors are compulsorily brought

under the purview of the SAKALA Services Act. This will ensure that all the Services being

provided by all the departments at the State & District levels have a defined process, a

defined SLA, and a formal grievance redressal mechanism in case the Investor would like to

escalate his/her grievance. Additionally, these SLA timelines are continuously being reviewed

for further reduction to improve efficiency.

2. Constitution of EoDB Coordination Committee

An EoDB Coordination Committee under the chairpersonship of the Chief Secretary to the

Government, has been constituted to review the implementation of EoDB initiatives in the

State. This Committee will on an ongoing basis track the various assessment frameworks being

introduced by the Department for Promotion of Industry & Internal Trade (DPIIT) and ensure

that a coordinated and time-bound action plan is taken up for implementation by all the

concerned departments in the State.

3. Constitution of Investment Proposal Monitoring Committees

To ensure tracking, adherence to SLA-based clearances, and inter-department coordination,

the State is constituting two Committees. The first under the Chairpersonship of the Chief

Secretary/Additional Chief Secretary & Development Commissioner will monitor all Investment

proposals approved by the State High Level Clearance Committee (SHLCC) and State Level

Single Window Clearance Committee (SLSWCC). The second under the Chairpersonship of the

Commissioner – Industrial Development will facilitate on-the-ground monitoring, investment

facilitation, inter-department coordination, and escalation, wherever needed.

8 Ensuring Future-Ready Human Capital

Ensuring future-ready human capital is a pivotal focus of Karnataka's industrial policy,

particularly through the implementation of comprehensive skilling and training incentives. The

policy highlights two key areas: increasing ITI (Industrial Training Institute) adoption in

collaboration with industry and creating curated curriculum development alongside industry

leaders.

Key initiatives in collaboration with the Department of Skill Development, Entrepreneurship,

and Livelihood Mission include expanding industry-specific ITI coverage to areas such as Food

Processing, CNC Operations, and 3D Printing Operations in regions like Gulbarga, Vijayapura,

and Tumkur. This expansion aims to strengthen linkages between industry partners,

encouraging them to adopt ITIs near defined clusters. The key benefits of this adoption are

significant, including a 40% reduction in employee training costs, reduced training time, and

creating a readily available talent pool for new manufacturing skills.

Moreover, the policy proposes collaboration between industry leaders, manufacturing startups,

local universities, and leading international universities to develop a manufacturing-focused

curriculum. This collaboration will lead to the development of customized curricula in various

fields

such

software

development,

chemical

handling,

thermal

management,

mechanics/structural design, power electronics, and advanced robotics. This curriculum,

developed in tandem with industry needs, aims to facilitate talent absorption programs

through internships and placements into manufacturing sectors. Government can act as a

facilitator for adoption of ITIs by private companies to create curated learning programs and

drive placement sessions for students.

Additionally, the policy emphasizes conducting skill-gap studies in all 31 districts, especially

within key manufacturing clusters, and providing refresher training programs for trainers. It

also involves identifying industry partners to act as ITI champions in each district, ensuring

sustained and focused development of the workforce.

Further, 30+ Government Tool Room Training Centres (GTTC) can be leveraged by various

industries to develop skilling programs on state-of-the-art infrastructure at nominal costs.

GTTC has affiliations with Siemens, PTC, SAP and Dassault Systems to leverage expertise in

various focus sectors.

The Nipuna Karnataka initiative is a transformative skill development program launched by the

Department of Electronics & IT / BT to bridge the gap between education and employability.

Aligned with the vision of fostering a future ready work force, the initiative focuses on

equipping youth with industry-relevant skills through advanced training programs, partnerships

with leading companies and leveraging emerging technologies. Nipuna Karnataka emphasizes

inclusivity by targeting diverse sectors including IT, manufacturing, agriculture and service

9 Promotion of Sustainability

Government of India has implemented several sustainability measures targeting industrial

activities to promote environmental conservation and sustainable growth. Key initiatives

include the National Solar Mission, which aims to make solar energy competitive with fossil-

based energy options, and the Perform, Achieve, and Trade (PAT) scheme, which mandates

energy efficiency in large energy-consuming industries. Additionally, the government promotes

cleaner production techniques through the National Cleaner Production Centre. The Green

Rating Project (GRP) by the government and NGOs assesses the environmental performance of

industries, encouraging transparency and environmental responsibility. These measures

collectively support India's commitment to sustainable industrial development and the

reduction of carbon emissions.

As per IEA, 22% of India’s emissions are contributed by Industries sector. Further, 92% of these

emissions are accounted from Iron & Steel, Cement, Chemicals and Metals industry. According

to BEE, Indian companies (except those in the cement industry) lag behind their global peers in

their energy intensity and consume upto 25% higher energy per unit production.

Karnataka’s focus on sustainability is highlighted in the current Industrial Policy. While the

promotion of sustainable practices is largely dependent on two fronts:

i. Quick Wins by Sustainability initiatives linked incentives for industries in 3 major areas



Focus on Decarbonization of existing industries



Regulations and Standards for New industries



Promotion of Green Industrial Areas and conversion of existing industrial areas

ii. Sustainability Outcome Linked Incentives:



Green Building Certifications by IGBC/LEEDs



Green Operations Certifications by GreenCo Rating System

9.1 Quick Wins by Sustainability Initiatives linked Incentives

While the green technologies keep improving day-by-day, it is important to adopt them and

transition smoothly into a greener future. The initiatives are aimed to focus on de-

carbonization of existing industries, setting regulations and standards for new industries, and

promoting green industrial areas. Some of the common initiatives taken in India and global

technological trends include



Conversion of existing Industrial Areas into Green Industrial Areas by retrofit

mechanisms: Various industrial areas like Ruhr in Germany, Jurong Island in Singapore,

Alberta and Ontario in Canada and Teesside Industrial Complex in the UK have taken

measures to convert their industrial areas by retrofit mechanisms like water

management, energy-efficiency buildings, carbon capture and storage (CCS)

technologies. Further, lot of private players especially in low temperature thermal

processes are electrifying by retrofitting electric boilers, Heat Pumps, infrared heating,

electric steam generation, electric furnaces, and ovens, etc.



Air Pollution Control Devices: Some of the companies are using sophisticated wet and

dry scrubbers for regulating gaseous emissions. Electrostatic Precipitators (ESP) are also

being used to remove pollutants from exhaust gases. Baghouse Filters, Cyclone

Separators, Catalytic Convertors and Activated Carbon Systems are also becoming

popular mechanisms to control contaminants from the emissions.



Incorporation of GreenCo Rating Systems: GreenCo rating systems has been

implemented by various states and acts as a pushing factor for industries to get their

baselines conducted and in turn receive LEEDS/IGBC/GRIHA certification. Government

of Karnataka will support in the application fees for these certifications and along with

KSPCB award of nominal grants to encourage industries getting baselined.



Restoring of Water Bodies and Water Treatment Plants: There have been significant

success stories on the water restoration programs run by private players (Eg: Mahindra

in Zaheerabad, Coca Cola in Ramnagara District restoring Amavasyakere and Thubinkere

lakes). As a result, it is critical to provide support to private players in undertaking such

programs which help in ensuring water security in challenging and draught prone

regions of Karnataka.



Industrial Symbiosis: Various industrial areas are being identified to have a waste

collection centre to ensure systematic collection of waste and possible conversion of

waste into energy. Further, allocation of land will be taking into account the supply

chain where waste of an industry in an Industrial area can be used as a raw material for

another industry in the same industrial area.



EV charging stations: Charging stations are proposed to be built by private players

while the Government authorities can provide the land for the Charging stations in the

Industrial Areas to facilitate cargo and passenger movement through electric logistics

fleet and vehicles.

List of sustainability linked incentives are proposed in the Industrial policy 2025-30 as

mentioned in Section 5.6 and the list of equipment / initiatives eligible for the incentives is in

Annexure 2.

Additionally, government will act as a facilitator for companies intending to procure renewable

energy from independent power producers.

9.2 Sustainability Outcome Linked Incentives

There are various agencies like IGBC, GreenCo, LEEDs, etc that conduct assessments of

company’s building and operational practices and provide ratings on various parameters of

sustainability. Further, as the European and US markets move towards greener future and

mandating their companies to source from green and sustainable suppliers, companies in India

will have to gradually move towards greener practices. Many companies in the world have their

targets of reduction of greenhouse gas emissions as well as sourcing of Renewable Energy by

2030. As a first step it is important for Indian companies to have baseline of their operations

and then leverage the support provided in the policy to improve their processes and

operations. GreenCo Rating Program has been identified for the assessment of operational

processes of the existing industries in Karnataka by KSPCB. Incentives offered GreenCo Rating

Program under the Sustainability Linked Incentives are described in Section 5.6

10 Logistics and warehousing

10.1 Initiatives for the sector

This policy covers 5 major initiatives:

1. Fiscal incentives

2. Ease of Doing Business

3. Upskilling and recognizing workforce

4. Technological advancements

5. Sustainability

10.1.1

Fiscal incentives

Fiscal incentives are provided as per section 5.4

10.1.2

Ease of doing business

Government of Karnataka has accorded “Industry” status to the Logistics and Warehousing vide

Government Order CI 242 SPI 2021 dated 21.10.2021. As a result, during change of land use

process, companies need to convert the land to Industrial Land Use to develop logistics and

warehousing infrastructure. Owing to the “Industry” status, eligibility of Industrial Power Tariff

will be applicable instead of Commercial Power Tariff for new and existing logistics and

warehousing projects in the State.

a. Environmental clearances

i. Threshold area for environmental clearance – In line with the MoEF

notification (Office Memorandum vide F. No. 19-131/2019-IA-III [E128798]

dated 4 October 2022), the area for EC exemption shall be increased to

1,50,000 sq. mts. For warehouses utilized for storage of raw materials

and finished goods of all consumption and industrial products including

but not limited to industrial and factory-made products (except

hazardous waste).

ii. Proposed change in categorization based on pollution load – Currently,

the logistics and warehousing industry falls under green/orange or red

category depending on the amount of air and water pollution generated

like any other industry. However, the logistics and warehousing industry

has a low pollution footprint. Owing to the minimal air and water

pollution generated by this industry, Government of Karnataka is actively

considering changing logistics and warehousing industry into the Green

category depending on the sewage production, STP setup and DG

generator capacities. A separate government order will be passed on the

same.

b. Development guidelines

i. Logistics and warehousing facilities in any land zone – Setting up of

logistics and warehousing facilities would be permitted in any zone

namely commercial, industrial and institutional to avoid procedural

hassles. If the facility is in less than 10,000 sq. m. of land, the setting up

logistics and warehousing facilities would be permitted in agricultural

zones for storage of raw materials and finished goods of all consumption

and industrial products including but not limited to industrial and

factory-made products (except hazardous waste).

ii. Standardization of ground coverage – Ground coverage is a crucial

factor for logistics and warehousing facilities, as the infrastructure in this

industry is predominantly designed for ground floor operations.

Presently, the ground coverage regulations for industrial establishments

differ from one taluk to another, as they adhere to the zonal regulations

specific to each taluk. It is as low as 30% in some taluks while ground

coverage for KIADB lands is 65%. Warehousing facilities established

anywhere (whether located within KIADB Industrial Areas or otherwise)

within the state will be permitted 65% ground coverage.

iii. Standardization of Floor area ratio – The floor area ratio (FAR) for

industrial establishments in different taluks varies due to adherence to

zonal regulations. In certain taluks, the FAR can be as low as 0.5. The

permissible FAR for warehousing facilities is determined based on factors

such as the built-up area and road width. Warehousing facilities

established anywhere within the state will be permitted the below FAR.

Sl. No

Extent of plot

(in sq. m)

Permissible

FAR

Minimum

Road width

(in m)

Up to 255

1.50

9.0

256 - 510

1.50

9.0

511 - 1020

1.75

12.0

1021 - 2025

1.75

12.0

2026 - 4050

2.00

12.0

4051 - 8100

2.00

12.0

8101 - 12200

2.25

18.0

Above 12201

2.50

18.0

Table 28- Permissible FAR for warehousing facilities

c. Other provisions

Single window agency - Karnataka Udyog Mitra (KUM), Department of

Industries & Commerce, to act as the single window agency for all

NOCs/clearance and approvals for setting up and operating logistics and

warehousing facilities in Karnataka, through its online portal. To further

enable ease of doing business for warehouses & logistics industry in the

State, specific clearances/ NoCs/ Approvals required for this sector will be

separately listed and provided on the KUM portal.

ii.

24x7 operations – Logistics and warehousing facilities will be permitted to

operate 24x7. This will be subject to the employer providing shift-wise

employee details and specifying weekly holiday for each of the

employees.

iii.

Provision of a single license combining Shops and Establishment License

and Trade License – Government of Karnataka is actively considering

clubbing both the Shops and Establishment License and Trade License for

the logistics and warehousing industry. The trade license charges are also

being assessed and the government is considering rationalization and

standardization of these charges across the state. A separate government

order will be passed on the same.

iv.

Provision of basic infrastructure – The state shall provide 24x7 robust

power, water and internet connectivity in all registered logistics and

warehousing facilities across the state.

10.1.3

Upskilling and recognizing workforce

The logistics and warehousing industry faces a significant challenge in terms of the availability

of skilled manpower. The current warehousing ecosystem in India is largely unorganized and

fragmented, resulting in a scarcity of adequately skilled workforce for efficient warehouse

operations. However, investing in the training of the workforce with optimal warehousing skills

can play a crucial role in improving overall efficiency, reducing lead times, and increasing

throughput for economic activities as a whole.

Several initiatives the state shall take to upskill the workforce in this sector are:

a) The state shall conduct industry connect workshops and skill gap studies to assess

the evolving requirements for skilled and semi-skilled manpower in the logistics and

warehousing sector. This will include identifying the specific needs for graduates

specializing in relevant domains.

b) Vocational and technical training courses will be upgraded based on identified skill

gaps from industry connect workshops and skill gap studies. These upgrades will be

implemented based on recommendations from industry experts to ensure the

courses align with the current demands of the logistics and warehousing sector.

c) Targeted courses will be added to Industrial Training Institutes (ITIs) to address

skill development in the logistics sector. Training programs will cover areas such as

logistics, supply chain management, inventory management, and the use of logistics

tools (including crane operations). Collaboration with institutes and industry experts

will ensure the delivery of comprehensive training.

d) The Skill Development, Entrepreneurship, and Livelihood Department (SDEL) will

facilitate skill development and upskilling programs in partnership with private

training partners, as required. These programs will aim to enhance the skills of the

workforce in the logistics and warehousing sector.

e) The establishment of driver training institutes under the Ministry of Road Transport

and Highway's Institute of Driving Training & Research (IDTR) scheme will be

encouraged. Additionally, private sector participation in establishing driver training

institutes will also be promoted. Topics such as Road Safety, Financial literacy, and

Digital literacy also need to be addressed during these training sessions.

Through these initiatives, the state aims to bridge skill gaps, provide relevant training

opportunities, and enhance the overall competency of the workforce in the logistics and

warehousing industry.

10.1.4

Technological advancements

Multiple technology interventions have been introduced globally to enhance the utilization of

resources and ensure the seamless movement of cargo throughout the supply chain. Karnataka

also aims to promote smart enforcement and use such technology interventions made by

various State departments/ agencies to enable safe and smooth logistics in the State. The

state aims to promote the following initiatives:

a) Promote 100% Vahan portal adoption by all RTOs.

b) Promote uploading of E-way bills for each journey of the truck drivers on the Vahan

portal prior to the start of the journey.

c) Encourage issuance of Fitness certificates only post mandatory checks for

standardized high-security registration plates (HSRP) and NHAI-approved FASTags.

Tests for issuance of fitness certificates can be done every quarter and uploaded on

the Vahan portal.

d) Promote the installation of Automatic Number Plate Recognition (ANPR) cameras

along the state and national highways in a phased manner and link this plate

number to the Vahan portal to verify the E-way bill and fitness certificate.

e) Promote installation of weigh-in-motion (WIM) along the highways to prevent

stoppage of vehicles at weight bridges, check overloading of freight vehicles,and

also check for major pilferages along the journey.

f) Promote the 100% E-Challan adoption by all RTOs

10.1.5

Sustainability

To enhance sustainability and resilience in warehouse design, construction, and operation, the

following strategies could be implemented:

a) Implement rainwater harvesting systems in all warehousing facilities with a build-

up area exceeding 1,00,000 sq.ft. This practice enables the collection and storage

of rainwater, reducing reliance on ground and external water sources and promoting

efficient water management.

b) Promote the usage of Electric Vehicles (EVs) for internal and short-distance

transportation within logistics facilities and ports. Encouraging the adoption of EVs

helps minimize the carbon footprint associated with logistics operations, leading to

reduced emissions and improved air quality.

c) Encourage the use of electric forklifts within warehousing facilities. Electric

forklifts produce zero emissions, offering a greener alternative to traditional diesel

or gasoline-powered forklifts. Promoting their adoption contributes to a cleaner and

more sustainable working environment.

d) Encourage the adoption of CNG or other green fuel-powered DG (Diesel

Generator) sets in warehousing facilities. Shifting from conventional fossil fuel-

based generators to cleaner alternatives helps reduce emissions and mitigate the

environmental impact associated with power generation.

e) Provide reimbursement, with a maximum cap of Rs. 5 lakhs per project, for

green certifications such as ISO 50001, GRIHA, LEED, and other recognized national

and international certifications. This financial incentive motivates warehousing

facilities

pursue

and

achieve

sustainability

certifications,

fostering

environmentally responsible practices and enhancing energy efficiency.

f) Promote the transition of e-commerce and delivery companies towards a fleet of

electric or green fuel-powered commercial vehicles. Encouraging the adoption of

sustainable transportation solutions within these sectors contributes to reducing

carbon emissions and promoting environmentally friendly logistics operations.

By implementing these measures, the warehouse industry can significantly contribute to

sustainability goals, improve environmental performance, and enhance the overall resilience of

logistics and warehousing operations.

11 Bridging Innovation Continuity

11.1 Continuing development of strong Startup Ecosystem

Karnataka has one of the strongest startup ecosystems in India. Particularly, Bengaluru, known

as the Silicon Valley of India, has a very rich environment of innovative startups and has

become a pivotal hub in India’s startup ecosystem. With around 18,000+ active startups,

Karnataka leads the country in technological advancements and entrepreneurial activities. The

state is home to numerous incubators, accelerators and co-working spaces, supporting startups

across various sectors such as IT, biotechnology and fin-tech. Government initiatives like the

Karnataka Startup Policy and Elevate 100 have been instrumental in providing financial aid,

mentorship, and infrastructure support. The state’s robust IT infrastructure, skilled workforce

and favorable regulatory environment have attracted significant venture capital investment,

amounting to over $4 billion in 2023 alone.

Furthermore, Karnataka's focus on research and development, exemplified by institutions like

the Indian Institute of Science and the numerous tech parks, continues to drive groundbreaking

innovations. This dynamic ecosystem not only boosts the state's economy but also positions

Karnataka as a global innovation powerhouse. Incorporating these elements into the new

Industrial Policy of Karnataka will ensure sustained growth and reinforce the state's leadership

in the startup domain.

Regularization of events like VentuRISE will ensure a platform for startups to thrive on the

problem statements relevant for big industrial players and bridge the gap between prototype

and commercialization of technologies.

Further, the State also conducts VentuRISE, a global startup challenge, to reward and support

growth-stage startups in manufacturing sectors. The event provides an opportunity for budding

entrepreneurs to showcase their solutions and products before a panel of experts in the field.

Grants for ideas to Proof-of-concepts for startups in the sectors of Advanced Manufacturing,

Robotics, Sustainability (Climate Change, Circular Economy, Renewable Energy),etc will be

facilitated on a case-by-case basis.

11.2 Enlarging R&D Base of Karnataka

Karnataka is home to almost 40% of India’s Global Capability Centres (GCCs). Many of the

foreign companies’ biggest and largest R&D centers outside their home countries are in

Karnataka. Through the Industrial Policy 2025-30, Karnataka plans to leverage the existing R&D

ecosystem and provide additional support for existing entities with an R&D facility who are

considering Karnataka as a destination for manufacturing investment. Multiple synergies can be

leveraged by co-location of R&D and manufacturing facilities as follows



Accelerated Innovation Cycle: Proximity of R&D and manufacturing allows for rapid

prototyping, testing, and iteration, speeding up the product development cycle. This

synergy enables quick transitions from concept to market-ready products, fostering a

more dynamic and responsive innovation ecosystem.



Enhanced

Collaboration:

Co-location

facilitates

seamless

communication

and

collaboration between R&D teams and manufacturing units. This close interaction helps

in quickly identifying and resolving design and production issues, leading to improved

product quality and reduced time-to-market.



Cost Efficiency: Integrating R&D and manufacturing can lead to significant cost savings

through shared resources and infrastructure. This consolidation reduces overheads,

transportation costs, and logistical complexities associated with separate locations.



Knowledge Transfer: The proximity of R&D and manufacturing teams promotes the

exchange of knowledge and expertise. This synergy helps in aligning research objectives

with practical manufacturing constraints, leading to more feasible and scalable

innovations.



Supply Chain Optimization: Co-locating R&D and manufacturing streamlines supply

chain operations, reducing lead times and enhancing inventory management. This

optimization ensures a more efficient flow of materials and products, contributing to

better overall operational efficiency.



Agility and Flexibility: The integrated setup allows for greater agility in responding to

market changes and customer demands. It enables quick adjustments in production

processes based on real-time feedback from R&D, enhancing the ability to customize

and adapt products swiftly.



Talent Attraction and Retention: A unified R&D and manufacturing environment can

attract top talent by offering a comprehensive and collaborative work ecosystem. It

provides employees with a holistic view of the innovation and production process,

leading to higher job satisfaction and retention rates.

Incorporating these synergy benefits into the new Industrial Policy of Karnataka can

significantly enhance the state’s competitiveness in attracting both R&D and manufacturing

investments, driving sustained economic growth and technological advancement.

Further, the Government of Karnataka proposes to institutionalize a state-of-the-art

Semiconductor Research Park. The Research Park will help in creating synergies between

existing global companies in Bengaluru with their advanced technology research parks abroad.

The notification on the process eligibility for entities to set up a facility in the proposed park

will be released in collaboration with IESA and the Department of ITBT.

Knowledge, Wellbeing and Innovation City is proposed to be incorporated with collaboration

from the private sector to catapult Karnataka’s R&D ecosystem and provide facilities for global

and domestic companies to be co-located and create sustainable impact by focusing on IP-

driven research. The city is planned across 2000 acres with state-of-the-art infrastructure

facilities for R&D as well as residential and industrial use cases.

11.3 Industry 5.0

The production landscape is experiencing an unprecedented transformation driven by Industry

5.0 technologies. This new industrial era brings together advancements like 3D printing,

artificial intelligence, virtual and augmented reality, the Internet of Things and next-

generation robotics. These technologies enable intelligent, flexible and customer-oriented

production systems, paving the way for innovative business models.

Industry 5.0 is set to revolutionize the manufacturing sector in Karnataka. A key advantage for

Karnataka is its robust IT services industry, home to some of the world’s largest IT companies.

To harness this potential and accelerate Industry 5.0 adoption, the policy aims to establish a

dynamic, competitive and world-class Centre of Excellence (CoE) for Industry 5.0.

The CoE will be developed in collaboration with industry partners, industrial bodies and

research and academic institutions, which have the necessary expertise to build and operate

the center. The State will act as a facilitator for the establishment of State and Regional

Centers. The Centre of Excellence will focus on training, demonstration, and dissemination of

futuristic and advanced manufacturing technologies, including artificial intelligence, virtual

and augmented reality, and robotics for data analytics, modeling, simulation, and other

related domains. Initially located in Bengaluru, the CoE will expand to Regional Centres across

the State in phases, offering entrepreneurs access to emerging technologies with a pay-per-use

facility.

As part of the state’s commitment to fostering innovation in Industry 5.0, Karnataka will also

establish state-sponsored, subsidized hardware-related incubators to support growth in the

hardware and manufacturing sectors. These incubators will provide essential infrastructure and

reduce costs for early-stage startups, enabling them to access advanced resources and

mentorship required for rapid scaling. By offering such facilities, the government aims to

accelerate the adoption of cutting-edge technologies, such as AI, robotics, and augmented

reality, thereby nurturing a dynamic startup ecosystem alongside established industry players.

Furthermore, the Government will support institutional tie-ups and collaborations to enhance

Industry 5.0 capabilities and offerings. This includes promoting training and skill-building

programs to explore the latest technology solutions and fostering deep integration of

technology platforms with physical systems.

Support

For all categories

Centre of Excellence

Centre of Excellence for Industry 5.0 shall be set up in the State

with the help of industry associations, institutes having the

requisite capacity, and any leading academic technical institution

of the State. The State will provide a grant of INR 100 crore for

CoE at Bengaluru and its Regional Centres, subject to the

condition that such CoE use only existing building/s and taking up

of new construction will not be considered.

Capital Subsidy for

supporting

Direct

Digital

Manufacturing

Capital subsidy of 50% is limited to INR 500 lakh per center for the

first five units in the State with the help of industry

associations/institutes having requisite capacity during the policy

period. These common facilities will be housed and managed by

industry associations/institutes on a pay-per-use basis & will act as

a repository.

Subsidy for Industry 5.0

implementation for

MSMEs

Subsidy of up to INR 5 lakh per company to implement Industry 5.0

solutions for 100 companies each year, for overall 500 companies

in the State during the policy period.

Table 29- Subsidy for Centre of Excellence on Industry 5.0

12 Ensuring Inclusive Development in Karnataka

Micro, Small, and Medium Enterprises (MSME) become the foundational stone for any region’s

industrial development. Furthermore, supporting the improvement of women's participation in

the workforce of Karnataka and ensuring strategic cluster development across regions of

Karnataka are the key initiatives to ensure inclusive development of the Industrial ecosystem.

12.1 MSME Bolstering

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of Karnataka's economy,

driving innovation, employment, and inclusive growth across the state. With over 8.5 lakh

MSMEs, Karnataka has a vibrant MSME sector contributing around 30% to the state’s GDP and

providing employment to over 55 lakh people. MSMEs are best placed to utilize local resources

and create local entrepreneurship and employment opportunities. Despite their significant

contributions, MSMEs have historically faced challenges such as high cost of funds, poor market

linkages, and inadequate exposure to global best practices.

Recognizing their pivotal role, the Karnataka Industrial Policy 2025-2030 places significant

emphasis on bolstering the MSME sector through targeted support and incentives. The policy

aims to create a robust ecosystem that nurtures the growth of MSMEs by enhancing access to

finance, technology, and markets, while also promoting skill development and sustainable

practices.

By fostering an environment conducive to MSME development, Karnataka aims to leverage its

existing industrial strengths and establish itself as a leader in industrial diversification and

inclusive economic progress. This policy underscores the state's commitment to ensuring that

MSMEs remain globally competitive and continue to drive sustainable and equitable

development across Karnataka.

Financial Incentives for MSMEs are elaborated on in Section 5.7

12.1.1 Establishing MSMEs

To ensure ease of establishing MSMEs, the following interventions are proposed:

Affidavit-Based Approval System

The Affidavit-Based Approval System (ABAS) is a testament to Karnataka's commitment to

simplifying the process of establishing MSMEs and promoting ease of doing business. Under this

system, MSMEs can begin operations by submitting a self-declaration or affidavit certifying

their compliance with necessary regulations and standards, eliminating the need for multiple

initial approvals, and allowing prompt business activities. The system will be operated by the

Department of MSMEs and the officers will be authorized to grant Affidavit Based Approvals to

the investors.

This streamlined approach grants MSMEs the flexibility to establish based on the affidavit for a

period of 3 years or up to date of commencement of commercial operations, during which they

must secure all requisite approvals and clearances from the relevant government departments

to continue their operations legally.

Single Window Clearance System

Karnataka has initiated a single window clearance system that facilitates ease of doing

business in the State. Through this streamlined mechanism, entrepreneurs can obtain all

necessary approvals and clearances from various government departments via a single online

portal, significantly reducing bureaucratic delays and complexities. This system provides a

one-stop solution for MSME registration, application submission, document scrutiny, and

approval issuance, ensuring a more efficient and transparent process. By simplifying regulatory

procedures, the single window clearance system fosters a conducive environment for MSME

growth and development in the state.

Infrastructure support



KIADB will earmark a minimum of 30% of allottable land in all their industrial areas for

MSMEs. KIADB will reserve 24.1% of the allottable land for SC/ST entrepreneurs, 10% for

Minorities / Physically Challenged / Backward Classes (Category1 and 2A only) / Ex-

Servicemen entrepreneurs, and 5% for women belonging to all categories in industrial

areas. KIADB will indicate 10% of the allottable land in industrial areas for MSMEs to be

allotted by DLSWCC. 40% of the total allottable land for SC/ST entrepreneurs in

industrial areas to be allotted by DLSWCC. The maximum extent of land to be allotted

by DLSWCC would be two acres per project. The minimum size of the plot to be

developed by KIADB will be 0.5 acres for MSMEs.



KSSIDC will earmark entire allottable land in their industrial areas for MSMEs. Out of

which, KSSIDC will reserve 24.1% for SC/ST entrepreneurs, 10% for Minorities /

Physically Challenged / Backward Classes (Category 1 and 2A only) / Ex-Servicemen

entrepreneurs, and 5% for women belonging to all categories in industrial estates.



KSSIDC will be allotted land in the KIADB industrial area, upon request for making

industrial plots and sheds of smaller sizes for the MSME sector. KIADB shall provide land

to KSSIDC on an absolute sale deed as per KIADB norms to enable KSSIDC to allot

plots/sheds to the industry on lease-cum-sale deed.



KSSIDC shall develop industrial estates exclusively for micro and small enterprises. The

area to be procured will not be less than 50 acres. 20% of the allottable area will be

reserved preferably for plug-and-play sheds out of which 10% of the area will be

earmarked for multi-storied sheds with plug-and-play facilities (wherever feasible) near

Bengaluru, Mysuru, Hubballi-Dharwad, Mangaluru, Belagavi, Tumakuru and Kalaburagi.

KSSIDC will provide these flats on a lease / rental basis. Liberal FAR would be

considered for flatted development/ industrial sheds/multi-storied industrial units.



Development of Rural Industrial Areas exclusively for MSMEs in the impact area of

industrial corridors will be undertaken along with infrastructure, like road connectivity,

drainage system, street lighting, and water supply by KSSIDC. Rural industrial areas and

estates will have a minimum of 100 to 150 plots measuring 2,000sq. ft. to 10,000 sq.,

ft. and will be developed in potential areas.

The above infrastructure support shall be granted in the relevant clusters as developed under

this policy on a best-efforts basis.

12.1.2 Operating MSMEs

12.1.2.1 Market Access



To improve the market linkages of MSMEs in the State, the Department of Industries and

Commerce, in collaboration with the industry, will conduct a Vendor Development

Conclave as an event allied to the Global Investors Meet, with the first edition of the

Vendor Development Conclave to be organized in 2025. This Conclave will act as a platform

for MSMEs to learn about buyer requirements (products and volumes) and meet with them

to pitch their services. Additionally, it will allow MSMEs to exhibit their products and

capabilities. It will also be a platform wherein MSMEs can upskill and gain technical

capabilities through sessions and workshops.



In addition to the Vendor Development Conclave, the MSME Department will conduct

Vendor Development Events in the State at least on an annual basis to create opportunities

for collaboration by bringing MSMEs together with OEMs, large manufacturers, and Public

Sector Undertakings. Similar events will be conducted at the district level as well.

12.1.2.2 Public Procurement Support



Goods manufactured by Micro & Small Enterprises located in the State will be allowed a

price preference of 15% against the Large & Medium Enterprises / Industries of the State

and enterprises/industries of other States during the Government Department’s purchases.



To enable wider dispersal of enterprises particularly in rural areas, the Government

Departments & State-owned PSUs shall procure 358 items from micro and small enterprises,

which have been reserved for exclusive purchase from them as per Ministry of MSME,

Government of India order S.O. 581 (E), dated 23.03.2012.



To reduce the transaction cost of doing business, Micro & Small Enterprises registered with

NSIC under a single point vendor registration scheme shall be facilitated by providing them

tender sets free of cost, exempting from payment of earnest money during purchases by all

Government Departments and State-owned PSUs.



KTPP rules will be amended as below to give fillip to Micro & Small Enterprises in Karnataka

 In a tender where the tenderers are both from the State of Karnataka as well as

from outside the State of Karnataka, the GST component shall be excluded for the

evaluation of the price.

 Preference shall be given to the Micro & Small Enterprises located within the State

and registered with the Department of Industries & Commerce in respect of those

items for which UAM / Registration Certificate / Udyam Registration are issued.

 Government Departments and State-owned profitable PSUs shall procure 20 percent

of goods from Micro and Small Enterprises located within the State. Out of this 4

percent of goods shall be procured from Micro and Small Enterprises promoted by

SC/ST entrepreneurs as per the guidelines issued by the Government of India



To incorporate the provisions of the Public Procurement (Preference to Make in India),

Order 2017 for all enterprises as detailed in order no. P-45021/2/2017/PP(B-II) dated

15.06.2017 and its amendments of Department for Promotion of Industry & Internal Trade

(DPIIT), Ministry of Commerce & Industry, Government of India in KTPP Act/Rules



The launch of the Karnataka Public Procurement Portal is indicative of the strong belief in

e-Governance initiatives to simplify government operations and infuse the public

procurement process with transparency and efficiency. MSMEs may utilize this portal to

enhance their ability to participate in the tender process for public procurement and

enhance market linkage in this manner



To support MSMEs, periodic matchmaking shall occur wherein buyer needs are collected

and shared with vendors, either through a Vendor Development Event, through a dedicated

digital platform or web application for MSMEs, or through any other platform as deemed fit

by the MSME Department

12.1.3 Measures to bolster SC/ST-owned MSMEs

SC/ST entrepreneurs will be encouraged in the establishment of enterprises and capacity

building in entrepreneurship.

The existing support under the Special Component Plan / Tribal Sub Plan Package

includes the following components:

a. KIADB and KSSIDC to allot land / shed at 75 percent subsidized cost in all zones. The

concessional allotment of land/shed will be available to domicile SC/ST entrepreneurs

only subject to a maximum of 2 acres / one shed and subsequent allotments will be at

prevailing rates of KIADB / KSSIDC. All other terms and conditions are as per Government

Order No. CI 76 SSI 2019 dated 28/05/2020, 16/02/2021, 30/11/2021, and 20/02/2022.

b. 60 percent subsidy limited to INR 5.00 lakh on bank loans availed by SC/ST entrepreneurs

through financial institutions/banks/co-operative and rural regional banks (excluding co-

operative financial associations) for setting up cottage and micro enterprises for a

project cost of up to INR 10.00 lakhs.

c. Soft Seed Capital Assistance: Interest-free loan at 50% of promoter’s contribution for

loan availed at 2:1 debt-equity ratio for project cost up to INR 10.00 crore to establish

new/ expansion/ modernization of micro/small enterprises by SC/ST entrepreneurs,

applicable as per the Government Order CI 91 SSI 2019 dated 13/09/2022.

d. Free distribution of Khadi Charakas to SC/ST Khadi Workers identified by Karnataka Khadi

and Village Industries Board.

e. Financial assistance to SC/ST entrepreneurs at 50 percent of the cost of establishment of

Private Industrial Estates limited to INR 5.00 crore on a minimum of 10 acres of land.

f. Reimbursement of the loan processing fee, legal fee, loan disbursement fee, etc.

charged by KSFC and other banks on the loans availed for the first time by SC/ST

entrepreneurs to establish Micro and Small Enterprises after 01-04-2017.

g. Subsidy on power charges for the first 5 years @ INR 2.00 per unit to SC/ST-owned new

Enterprises working from 01-04-2017 onwards.

h. Entrepreneurs’ awareness and development programs

ii. The following infrastructure support will be provided to SC/ST Entrepreneurs:

a. KIADB will reserve 24.1% for SC/ST entrepreneurs out of the entire area in new

industrial areas.

b. KSSIDC will reserve 24.1% for SC/ST entrepreneurs out of the entire area in new

industrial estates.

c. State will conduct Entrepreneurship Development Programs exclusively for prospective

SC/ST entrepreneurs.

d. KSSIDC will construct ‘D’ and ‘C’ type sheds in potential reserved assembly

constituencies in the State for Micro and Small Enterprises promoted by SC/ST

entrepreneurs.

iii. Additional fiscal incentives under this policy for the establishment of new enterprises and

expansion/diversification/modernization

offered

MSMEs

promoted

SC/ST

entrepreneurs are available in Section 5 under Table 21 and Table 22.

12.1.4 Support to Artisans

Artisans are skilled individuals embodying Karnataka’s rich cultural heritage through a variety

of crafts. However, many of these traditional crafts are in decline due to economic and other

factors. It is essential to preserve and protect these crafts through targeted interventions. By

modifying or redesigning heritage crafts to meet current market demands, we can ensure their

preservation and relevance. This sector, predominantly rural-based, holds significant

potential. It can sustain existing artisans and attract new entrants into craft activities. This

initiative aims to not only safeguard traditional crafts but also to empower artisans and

stimulate economic growth in rural areas.

Cultural Villages / Tourist Villages / Cultural Centers will be set up at tourist destinations by

the Tourism Department that can provide a platform for artisans.

The following support is proposed to be provided for artisans:



Customized free training at NID and NIFT for selected trainers.



Educating artisans in modern skills like e-marketing and information & communication

technology.



Organizing study tours for selected artisans across the country.



Providing stall rate concessions at metro stations, airports, bus stands, railway stations,

major star hotels and major tourism attractions throughout the State.



Hosting an annual national-level haat, offering a platform for artisans to showcase and

sell their products.

12.1.5 MSME Excellence Awards

The Government will confer annual awards to MSMEs for achieving excellence and growth in

manufacturing. This initiative aims to recognize and celebrate the outstanding contributions of

MSMEs to Karnataka's economy. By honoring their achievements, the Government seeks to

encourage innovation, enhance competitiveness, and inspire other enterprises to strive for

excellence in their respective fields. These awards will not only provide recognition but also

boost the morale of MSMEs, driving them towards greater success and development.

12.1.6 Digital Portal/Website

To further enhance support for MSMEs, a comprehensive digital portal or website is proposed

to be developed as part of the Vendor Development Conclave 2025. This portal will integrate

and act as a platform for matchmaking to aid vendor development within the State. By

consolidating these features into a single, user-friendly portal, the government aims to provide

MSMEs with a powerful tool to navigate their business challenges, access vital information, and

capitalize on opportunities for growth and development. This digital initiative will further

bolster Karnataka's commitment to fostering a thriving MSME sector.

Key features of the portal include:



Details and/or profiles of other registered vendors and buyers;



Detailed component/capability requirements of registered buyers;



Platforms for MSMEs to connect with potential buyers and partners, including

matchmaking services;



Details of upcoming and past skilling programs, including registration information and

schedules, as well as access to online training modules and resources.

12.2 Increasing women's participation in the workforce

As per the Annual Report of the Ministry of Labour’s PLFS survey, Karnataka’s female labor

participation in the workforce for all age groups is at 30.3% over the national average of 27.8%.

This number for the urban areas in Karnataka is 24.8%, thus indicating a significant amount of

opportunity for industries to employ women in the labor force. The inclusion of women in

Karnataka's workforce is a pivotal component of sustainable economic growth and societal

development. Increasing women's participation in the labor market significantly boosts the

state's productivity and innovation. Diverse teams foster a variety of perspectives, leading to

more effective problem-solving and decision-making processes. Moreover, women's economic

empowerment contributes to poverty reduction and enhances the overall standard of living. By

promoting gender equality in employment, Karnataka can tap into a vast pool of talent, driving

industrial growth and competitiveness. This inclusivity not only aligns with global development

goals but also ensures a more equitable distribution of wealth and resources. Implementing

policies that support women's workforce participation, such as flexible working hours,

maternity benefits, and safe working environments, will create a more dynamic and resilient

economy. Ultimately, fostering gender diversity within industries is not just a social imperative

but a strategic advantage for Karnataka's industrial sector.

12.3 Cluster Development

The following clusters have been developed in Karnataka which have become successful in

attracting the respective ecosystem.



Toys Cluster – Koppal



FMCG Cluster – Dharwad



CDGA Cluster - Dharwad



Plastic Cluster – Canara, Mangalore



PM MITRA Textiles Park – Kalaburagi

Dedicated cluster development across Karnataka is envisioned to achieve strategic growth

across regions and sectors in the state. As per the requirements of the industry as well as the

availability of natural resources, clusters are being proposed to be built. The Electronics

Manufacturing Cluster (EMC) is proposed in the Bengaluru Rural in collaboration with the

Government of India apart from existing EMC in Mysuru and Hubballi-Dharwad.

As one of the strategic sectors for Karnataka, EV clusters are proposed in the following

locations. These clusters will provide ready-to-occupy land parcels, ready-built factories,

testing labs, proving grounds, and homologation facilities.



Gauribidanur, Chikkaballapur – This cluster encompasses ~825 acres of acquired land.

It is situated 70 kilometers away from Bengaluru and 90 kilometers from Hoskote, a

prominent auto cluster housing renowned manufacturers such as Honda and Volvo.



Chikkamalligewada, Dharwad- The second cluster spans around 1000 acres of land. It is

conveniently positioned 30 kilometers from Hubballi Airport and 26 kilometers from the

Hubli-Dharwad cluster.



Harohalli, Ramanagara – The third cluster spans around 700 acres of land. It is 40

kilometers from Bengaluru and ~20 kilometers from the Bidadi auto cluster housing

Toyota.



Bengaluru Rural – A dedicated Pharmaceutical cluster with state-of-the-art

infrastructure and common facilities such as CETP, etc. is proposed near Bengaluru



Bellary – A dedicated cluster for steel processing and manufacturing units is proposed in

the district of Bellary

Also, specifically in the northern regions of Karnataka, the following clusters are proposed:

Districts

Clusters

Vijayapura

Food Processing, Renewable and Solar Cells

Hubballi & Dharawad

EMC, Consumer Durables & Goods Appliances and

FMCG

Gulbarga

Textiles and Food Processing

Yadgir

Pharmaceuticals

Chitradurga

Pharmaceuticals

Table 30 - Proposed Clusters in North Karnataka

13 Governance mechanism

13.1 Policy Monitoring

Revamping of the Single Window System will also be facilitated by the formation of

committees to monitor the applications and the progress of each application.

 A High-level Monitoring Committee chaired by the Chief Secretary will be established with a

cadence of quarterly reviews to check on the status of applications by using the dashboards

created in the Single Window System with the members of the committee being the heads

of the department.

 An inter-departmental working committee reporting to the High-Level Monitoring

Committee will conduct monthly working sessions with Nodal officers from each department

to process respective investment applications on the Karnataka Udyog Mitra portal.

 A State Level Co-ordination Committee chaired by the Additional Chief Secretary/Principle

Secretary of the Department of Commerce and Industries is empowered to add/delete

service activities listed in Annexure-4 and make changes necessary for the implementation

of the policy. The decisions made by this Committee would be final in case of any

ambiguities during the implementation of this policy.

Also, targeted nodal officers from respective Government Authority – Karnataka Udyog Mitra

will be allocated to every investor for an end-to-end investment journey to escalate pending

issues of investors.

13.2 Policy Execution

The policy will be executed by the Department of Industries and Commerce along with the

relevant collaboration of other departments and authorities of the Government of Karnataka.

The State Government reserves the right to review or modify the Policy as and when needed in

the public interest. However, Forms released as part of the Policy may be modified, changed,

added or deleted as and when needed for the sake of convenience in the implementation of

the Policy.

The Government may revise the Policy, in full or in part, prospectively or retrospectively, to

keep harmony with the provisions of the State Goods and Services Tax Act and Rules made

there under.

14 Annexures

Annexure 1: Definitions

As per the MSMED Act, 2006, MSMEs have been defined as follows:



Micro Enterprises- Investment in Plant and Machinery or Equipment does not exceed INR

1 crore and turnover does not exceed INR 5 crore.



Small Enterprises- Investment in Plant and Machinery or Equipment does not exceed INR

10 crore and turnover does not exceed INR 50 crore.



Medium Enterprises – Investment in Plant and Machinery or Equipment does not exceed

INR 50 crore and turnover does not exceed INR 250 crore.

For the calculation purpose of incentives for MSMEs, the following definitions will be used

irrespective of the definitions under the MSMED Act or future Government of India Guidelines.

Category

Criteria

Micro

Investment in Plant and Machinery or Equipment < INR 1 Crore

Small

Investment in Plant and Machinery or Equipment between INR 1 Crore

to INR 10 Crore

Medium

Investment in Plant and Machinery or Equipment between INR 10 Crore

to INR 50 Crore

1. Large Enterprise: An Industrial Unit that is not classified as a Medium Enterprise and

with an investment in fixed assets up to INR 300 crore shall be classified as a large-

scale enterprise.

2. Mega Enterprise: Projects with an investment in fixed assets above INR 300 crore and

up to INR 1000 crore

3. Ultra-Mega Enterprise: Projects with an investment in fixed assets above INR 1000

crore

4. New Project: New projects shall mean units that undertake to invest in fixed assets on

or after the announcement of this Policy. This will include the units that have taken

effective steps on or before the announcement of this Policy and could not fulfill the

conditions stipulated for qualifying as pipeline units under Industrial Policy 2020-2025.

5. Exporter: means a unit/enterprise that exports more than 50% of its production and

holds an IEC (Importer Exporter Code) number, unless otherwise specifically exempted.

6. IEC (Importer Exporter Code) number: is a 10-digit code number given to an exporter

or importer by the regional office of the Director-General of Foreign Trade (DGFT),

Ministry of Commerce and Industry, Government of India.

7. 100% Export Oriented Enterprises: A 100% export-oriented enterprise is an industrial

enterprise offering to export its entire production, excluding the permitted levels by

the Government of India from time to time of domestic tariff area sales for the

manufacture of goods, including repair, re-making, reconditioning, re-engineering and

rendering of services. Such Enterprises may be set up either under the Export Oriented

Enterprises or under the EPIP [Export Promotion Industrial Park] Scheme under the

EHTP [Electronic Hardware Technology Park] Scheme or Software Technology Park

Scheme or Special Economic Zone.

8. Value of Fixed Assets (VFA): Value of Fixed Assets shall mean the total investment

made on land, building and plant & machinery including R&D equipment and such other

productive assets like tools, jigs & fixtures, dyes, utilities like boilers, compressors, DG

Sets, cranes, material handling equipment and such other equipment directly related to

production purposes. It also includes installation of plant and machinery (erection

charges), electrical items including electrical wiring.

9. Special Category Units: Units established exclusively by an SC / ST, Women, Minorities,

Physically Challenged & Ex-Servicemen Entrepreneurs as a proprietary concern or all

the partners or directors of the partnership firm / Co-operative Society/Private limited

companies or any other legal entity belonging to above-mentioned categories

respectively.

10. Employment: Direct Employment shall mean employees who are on the rolls of the

respective companies which will include contract labours engaged in production line. It

will, however, not include casual labours. The percentage of contract labours engaged

should not exceed 40% of total labour force.

11. Date of Commercial Production: Date of isse of first sale invoice after trial production

either by a new unit or after expansion / diversification / modernization.

12. Expansion / Diversification / Modernization: The existing enterprise must invest

additional new capital to the tune of at least 25% of the fixed assets in the Expansion /

Diversification / Modernization program. The quantum of turnover under Expansion /

Diversification / Modernization program eligible for base subsidy is the incremental

increase in the turnover over and above the average turnover during the immediate 3

years before the commencement of the commercial production in the Expansion /

Diversification / Modernization program.

13. Turnover: The aggregate value of the realisation of amount made from the sale of

manufactured goods by the company / enterprise during a financial year.

Income from other sources (non-operating activities) like interest received, grants or

subsidies, trading activity, resale of products / goods will not be counted under

turnover.

14. Cold storage: A facility developed in at least 10,000 sq.ft. of storage area in the state

with a minimum investment of Rs.1.5 crores providing services such as storage and

minimal processing of perishable/ temperature sensitive cargo such as agriculture,

horticulture, dairy, fish & marine, poultry & meat products, pharma, etc. with a

linkage from source to the consumer.

15. Truck terminal: A facility developed in at least 5 acres of land in the state with a

minimum investment of Rs.7.5 crores providing services such as repair and

maintenance of the trucks, stores for spare parts, ATMs, fuel stations, parking spaces,

transport offices, sanitary facilities, lodging facilities for drivers and helpers,

weighbridges, etc. These facilities are developed to ease traffic congestion in strategic

locations such as the district logistics nodes, industrial areas, national/ state highways,

and expressways intersection points.

16. Warehouse inside industrial area: A facility developed in at least 20,000 sq.ft. of

storage area in the state with a minimum investment of Rs. 3 crores providing a place

for storage and/or accumulation of goods under controlled conditions and equipped for

providing handling, transportation as well as value-added services such as sorting,

grading, packaging etc.

17. Warehouse outside industrial area: A facility developed in at least 70,000 sq.ft. of

storage area in the state with a minimum investment of Rs. 10 crores providing a

place for storage and/or accumulation of goods under controlled conditions and

equipped for providing handling, transportation as well as value-added services such as

sorting, grading, packaging etc.

18. Large Logistics Parks: A facility developed on at least 20 acres of land in the state

with a minimum investment of Rs. 100 crores providing a place for storage and/or

accumulation of goods under controlled conditions and equipped for providing handling,

transportation as well as value-added services such as sorting, grading, packaging, etc.

19. Mega Logistics park: A facility developed in at least 100 acres of land in the state with

a minimum investment of Rs.350 crores providing services such as cargo aggregation/

segregation, distribution, inter-modal transfer of cargo and containers, open and/ or

closed storage, temperature controlled and/ or ambient storage, material handling

equipment, parking, value-added services, and other related facilities as per

requirement for efficient movement and distribution of semi-finished or finished

products. Logistics parks shall be equipped with supporting infrastructure including

internal roads, communication facilities, open and green spaces, water pipelines,

sewage and drainage lines, power lines, feeders, and other facilities as per the

requirements of the park.

Annexure 2:

List of initiatives eligible for sustainability-linked incentives

For all green solution areas defined below, the State reserves the right to add or exclude

specific activities within any area, sector, or product from time to time as deemed fit.

(a) Environmental Infrastructure Facilities:



Effluent Treatment Plant, Common Effluent Treatment Plant, Waste Management

Projects & Industrial Hazardous Waste Disposal Projects



Establishing “Reuse and Recycling of Industrial Waste, electronic waste & plastic waste

Plant”



Augmentation and technology upgradation of existing ETPs & CETPs



Common spray dryer, common multiple effect evaporator



Common Boiler Project by SPV



Implementation of cleaner production technology in place of existing processes such as

substitution & optimization of raw material, reduction in water consumption or energy

consumption, or waste generation



For environment management projects with the use of clean, Efficient, and Innovative

Pollution Control Equipment



Installation of online Continuous Stack Emission Monitoring Systems (CEMS)



Setting Up of Environment Management System including setting up of Environment

Management Laboratory



Purchase of new equipment/system related to safety, occupational health, or for

environment compliances for the common use of enterprise located in the cluster



Development of Green Estate & Green Buildings (defined as per Indian Green Building

Council Definitions) for set up/ relocation/retrofitting of existing polluting industrial

units into Green Industrial Estates.



Green Buildings which obtain green rating under the Indian Green Building Council

(IGBC/LEED Certification)



Cost for preparation of site master plan for relocation and retrofitting of existing

pollution industrial units into Green Industrial Estates.

(b) “Zero Defect and Zero Effect (ZED) Rating” means Zero Defect and Zero Effect rating or

certification or approval granted by the Quality Council of India (QCI) under the ZED

certification Policy of the Government of India.

the effluent water is either used or fully evaporated and no effluent is discharged out of

factory premises, as certified by the Karnataka State Pollution Control Board.

d) Water Conservation Solutions



Wastewater treatment and recycling systems using technologies such as Activated

Sludge Process (ASP), Membrane Bio-Reactors (MBR), Reverse Osmosis (RO), etc. to

increase supply and use of treated water.



Smart Solutions/IoT for Water and Wastewater to reduce dependency on manpower and

enhance business continuity and remote operations using smart meters/ pumps/

sensors, data analytics, and cloud solutions.



Adopting rainwater harvesting, restoring water bodies by de-silting defunct water

bodies within the premises



Zero Liquid Discharge Solutions

(e) Energy Efficiency Solutions: Industries falling under the Karnataka Green Rating system - by

meeting the eligibility criteria defined in the Green Rating of Industries in Karnataka State

Pollution Control Board – CII GBC GreenCo Rating System.

Further, in core manufacturing sectors like Steel and Cement, new investments will get

benefits for installing mechanized rake-based material collection systems for raw materials.

(f) Air Quality/Emission Reduction measures will be applicable for those green interventions

which the State Authority (KSPCB) deems fit

(g) Electrification of Low-Temperature thermal processes includes Li-ion Battery Energy

Storage systems replacing traditional diesel generator power backups, as well as heat

technologies like electric heat pumps, induction heating, electric resistance heating,

microwave heating, electric boilers, electrically heated dryers

(h) Construction of EV Charging stations in KIADB Industrial Areas in allocated areas

Annexure 3:

Terms and conditions for Incentives and Concessions under Industrial Policy 2025-30

a. The Industrial Policy 2025-30 will come into force from the date of issue of enabling

Government Order and will be valid for a period of five years or till a new policy is

announced. Once the new Industrial Policy 2025-30 comes into operation the Industrial

Policy 2020-25 stands withdrawn. However, Enterprises which have been sanctioned

and have partly availed incentives and concessions under earlier policies shall continue

to enjoy those benefits as per respective sanction orders.

b. The applicability of the Industrial Policy 2020-25 or Industrial Policy 2025-30 for the

Projects which are under implementation (pipeline projects) at the time of

announcement of Industrial Policy 2025-30 is decided as follows:

Projects/Enterprises cleared through District-level, State Level, and State High-

Level Clearance Committees during the 2020-25 Policy period and if they have

availed any of the incentives and concessions for the project as per the 2020-25

policy are eligible to avail of other incentives and concessions under 2020-25 policy

only.

ii)

If any enterprise has taken all the following effective steps before the date of issue

of Government Order of the new industrial policy 2025-30, then the unit shall avail

incentives as per policy 2020-25 only.



Date of entering lease or sale agreement of the premises (either land or

building)



Date on which possession certificate of the plot or shed is taken from

KIADB/KSSIDC or any other agency



Date of approval of building plan by the competent authority



Date of release of the first installment of loan from Financial Institution /Bank



Date of placement of first purchase order for plant and machinery

iii)

If any enterprise has not taken above all effective steps and not availed any

incentives and concessions during the 2020-25 policy period, they shall avail

incentives as per the Industrial Policy 2025-30 only.

c. Incentives and concessions under this policy will be available to all new and additional

investments made during the policy period for the establishment of new enterprises and

expansion/diversification/modernization.

d. Incentives and concessions under this policy shall primarily be available only for

Manufacturing Enterprises / Industries and specified categories of service enterprises as

listed in Annexure 4.

e. Stamp duty exemption and exemption on tax on electricity tariff as per the 2025-30

Policy will come into effect only after the issue of enabling notifications by Revenue &

Energy Departments respectively.

f. Irrespective of the location / industrial activities, enterprises as listed in Annexure 5

will not be eligible for any incentives and concessions. However, considering their

contribution to the environment, the eligible subsidy will be extended to new

investments made in establishing ETPs.

g. Enterprises can avail incentives and concessions under any one policy of the State. i.e.,

Enterprises availing incentives and concessions under Industrial Policy 2025-30 will not

have a choice to avail partly in the Industrial Policy 2025-30 and partly in any other

Policy of the State in force and vice-versa, unless otherwise specified by the

Government. Enterprises eligible for sectoral policies of ESDM, A&D, and Clean Mobility

(EV Policy) are eligible to apply for Industrial Policy 2025-30. The entity will be able to

claim benefits under a single policy either Industrial Policy 2025-30 or sectoral policy.

h. Eligible MSMEs shall commence commercial production within 3 years from the date of

approval from the DLSWCC/SLSWCC. Any enterprise that has not taken approval from

the DLSWCC/SLSWCC for their project for any reason shall commence commercial

production within 3 years from the date of taking possession of land/building or taking

building plan approval.

i. Eligible MSMEs shall apply for sanction of Capital Subsidy or Base Subsidy (Capital

Subsidy or Production Linked Incentives) within one year from the date of

commencement of commercial production. Large and above categories can claim

capital/PLI incentives within 3 years from the date of commencement of commercial

production.

j. Commerce and Industries Department will prescribe a standard format for a certificate

to be issued by Financial Institutions / Commercial Banks / chartered accountants

keeping in view the definition of fixed assets, intangible assets, and the assets not

eligible for sanction of incentives and concessions.

k. While

calculating

the

value

eligible

fixed

assets

created

during

the

expansion/diversification/modernization

enterprise

only

additional

new

investments shall be considered.

l. The choice of Base Subsidy between Capital Expenditure Subsidy and Production Linked

Incentives subsidy will have to be notified to the Government of Karnataka and will

remain constant for the approved investment. The choice would have to be made while

filing for subsidy. The exact procedure would be detailed in the Operative Guidelines of

this policy.

m. Disbursement of Capital Expenditure Subsidy will commence after commercial

production and will be disbursed in 5 annual installments until the actual investment

amount by SHLCC/SLSWCC for Large and above Industries.

n. Disbursement of Capital Expenditure Subsidy will commence after commercial

production and will be disbursed in 4 annual installments until the actual investment

amount by SLSWCC for Medium Industries.

o. Micro, Small, and Medium Enterprises (MSME) have been classified based on investment

in plant & machinery or equipment & turnover as per the MSMED Act, 2006.

p. The incentives and concessions under this policy will reckon these definitions of MSME

and shall automatically stand revised to the revision made by the Government of India

from time to time and eligible incentives and concessions will be as per the new

definition from the date of change in the definitions, subject to enabling orders issued

by the State Government.

q. Medium Enterprises Incentives

Base Subsidy on a specified percentage of turn over will be provided based on the

location and investments made for a fixed period or Value of Fixed Assets. Eligible

enterprises shall have to obtain a separate registration under the GST Act for

manufacturing eligible products only & only this turnover will be considered for

Capital subsidy or Base Subsidy.

ii)

The eligible enterprise shall not carry out any trading activity or provision of any

services not relating to eligible products from its place of business.

iii) The eligible unit shall have to obtain a separate registration if the unit carries out

trading activity or provision of any services not relating to eligible products. If

carried out, this turn over will not be eligible for availing Capital Subsidy or Base

subsidy.

iv) Resale of products/goods by the eligible unit will not be considered for turnover

incentives.

If the eligible enterprise is already manufacturing the same production one or

more existing industrial enterprises in Karnataka, then the turnover of all such

existing industrial units of the same products for five consecutive years

commencing from the year from which the industrial undertaking avails incentives

under this policy shall not be lower than the average turnover of the same product

in the immediately preceding three financial years from the year the industrial

undertaking avails incentives under this policy.

vi) Incentives will be provided only to new investments.

vii) For enterprises undertaking only job work, combination of job work and

manufacturing, enterprises under composite tax scheme & Enterprises engaged in

manufacturing/job work of zero GST products, eligible service enterprises, only

Capital Subsidy is applicable. The mode of computation / availment of Capital

subsidy will be detailed in the operative guidelines.

r. Further for an industrial enterprise that is not classified as Micro, Small, or Medium

Enterprise, the State Government has defined it as a Large Enterprise, Mega Enterprise,

or Ultra-Mega Enterprise, based on the investment.

s. The incentives and concessions under this policy will reckon these definitions of Large

Enterprise, Mega Enterprise, and Ultra-Mega Enterprise and shall automatically stand

revised to the revision made by the State Government from time to time and eligible

incentives and concessions will be as per the new definition from the respective date of

change in the definitions.

t. Turnover Related Incentives (PLI) for Large Enterprise, Mega Enterprise, Ultra-Mega

Enterprise:

Base Subsidy on a specified percentage of turnover will be provided based on the

location for a fixed period or value of the fixed assets as specified in Table 6.

ii)

Eligible enterprises shall have to obtain a separate registration under the GST Act

for manufacturing of eligible products only & only this turnover will be considered

for Base Subsidy.

iii) The eligible enterprise shall not carry out any trading activity or provision of any

services not relating to eligible products from its place of business. The eligible

unit shall have to obtain a separate registration if the unit carries out a trading

activity or provision of any services not relating to eligible products. If carried out,

this turnover will not be eligible for Base Subsidy.

iv) Resale of products/goods by the eligible enterprise will not be considered for

turnover incentives.

If the eligible enterprise is already manufacturing the same product in one or more

existing industrial enterprises in Karnataka, then the turnover of all such existing

industrial enterprises of the same products for five consecutive years commencing

from the year from which the industrial undertaking avails incentives under this

policy shall not be lower than the average turnover of the same product in the

immediately preceding three financial years from the year the industrial

undertaking avails incentives under this policy.

vi) Incentives will be provided only to the new investments. The investment made

within a period of a maximum of five years from the commencement of the project

implementation will be considered to determine the quantum of VFA. If any

ambiguity or clarification is required for computing turnover, the same will be

clarified by the State Level Co-ordination Committee and its decision shall be final.

u. For Ultra-Mega Enterprise where SHLCC approves investments to be made in phases, the

turnover-related incentive will commence from the date of commencement of

commercial production in the first phase and these incentives will be proportionate to

the investments in the first phase and will automatically graduate to the next level

depending on the actual investments made.

v. Employment Criteria for enterprises availing incentives and concessions under Industrial

Policy 2025-30 are as follows:

All new industrial investment projects shall create the maximum possible direct

employment opportunities with a minimum employment of 70% to Kannadigas on

an overall basis and 100% in the case of Group D employees.

ii)

District Industries Centres will monitor the compliance of employment to

Kannadigas for a period of initial 5 years. Failure of the industries to employ

Kannadigas as stipulated above will be reported to the concerned DLSWCC/

SLSWCC/ SHLCC which may recommend for recovery of incentives and concessions

sanctioned to the unit.

iii) Enterprises requiring lower employment / enterprises which are unable to provide

employment proportionate to investment as stipulated will have a lower Capital

Expenditure Subsidy / PLI in proportion to the total employment provided.

w. Enterprises shall comply with the Corporate Social Responsibility (CSR) obligations as

per Section 135 of the Companies Act 2013.

x. Investments made by any existing/new unit/entrepreneur/partnership firm/companies

etc on land, building, plant & machinery acquired from any financial institution/ bank

under Sec 29 of SFCs Act, SARFAESI Act, Debt Recovery Tribunal, or any of the acts or

any tribunal, etc, are not eligible to avail incentives and concessions under this policy.

However, any new investment made for expansion/diversification/modernization by

such units, eligible incentives, and concessions will be available as per this policy.

y. Quantum of Incentive for Expansion/ Diversification / Modernization: To be eligible for

incentives under an expansion/diversification/modernization program, the Enterprise

must invest additional new capital to the tune of at least 25% of the fixed assets in the

expansion/diversification/modernization program. The quantum of turnover under the

expansion/diversification/modernization program eligible for Base subsidy is the

incremental increase in the turnover over and above the average turnover during the

immediate 3 years before the commencement of the commercial production in the

expansion/diversification/modernization program.

z. While

calculating

the

Base

subsidy

percentage

turnover

for

expansion/diversification/modernization of enterprises, only the new investment made

for expansion/diversification/modernization shall be taken to arrive at the Value of

Fixed Assets (VFA).

Annexure 4:

List of Service Enterprises Eligible for Package of incentives and concessions under

Industrial Policy 2025-30

Applicable to projects approved by DLSWCC / SLSWCC / SHLCC (Except Micro and Small

Enterprises).



Powder coating / Chrome plating / Industrial Electroplating/Painting Enterprises,

Industrial paintings engaged in job work.



Weigh bridges set up within the KIADB / KSSIDC industrial areas/estates.



Material / Product Testing Laboratory.



Off-set printing, digital printing (excluding digital photo printing, flex printing).



Common Effluent Treatment Plant.



Industrial Hazardous waste management facility



General Engineering, Fabrication.



Flour Mill and Rice Hulling



Food and agro-based industries



Vehicle Scrapping units with at least an investment of INR 10Cr



Dismantling and recycling of batteries



Bottling of Liquid Oxygen



Plastic, Electronic Waste and Biomedical Waste Recycling



Waste to energy generation facilities



Healthcare Facilities in the KIADB/KSSIDC Area excluding Base Subsidy or Capital

Subsidy



Electrolyzer manufacturing



Iron ore beneficiation plants



Green Hydrogen, Green Ammonia and Green Methanol manufacturing



Solar cells manufacturing – standalone and with modules



Li-ion cell manufacturing

Annexure 5:

List of Industrial Activities / Enterprises Not Eligible for Incentives and Concessions

1. Breweries & Distilleries of all types for human consumption alcohol excluding winery and

ethanol plants established as integral part of fuel manufacturing process

2. Khandasari and Jaggery making enterprises not certified by FSSAI with investment less than

INR 1Cr

3. Photo Studios & Colour Processing and instant photo printing Enterprises

4. Photocopying / Xerox Machines / Fax Machines / Data Entry / Data Recovery enterprises.

5. Fertilizer mixing Units

6. All types of Sawmills excluding manufacture of particle board/Low-Density Fiber Board

(LDF)/Medium Density Fiberboards(MDF)/High-Density Fiberboards(HDF).

7. Beedies / Cigarettes / Cigars / Gutka & Tobacco based products manufacturing enterprises.

8. Azoic / Reactive Dyes manufacturing enterprises.

9. Firecracker manufacturing enterprises.

10. Industries manufacturing Ozone-depleting substances.

11. Laundries including Power Laundries.

12. Brick-making Enterprises excluding Hydraulic press, Cement Hollow / Solid Blocks, Wire

Cut, Fly AshBricks, and Refractory Bricks.

13. Poultry including hatcheries.

14. Popcorn Manufacturing.

15. Coffee roasting and grinding units having installed capacity of less than 2MT a day.

16. Clock and Watch / Mobile / Computer and Hardware equipment repair enterprises.

17. Cassette recording [Audio & Video] enterprises.

18. Cyanide Manufacturing enterprises.

19. Mining activity.

20. Lime kiln / burnt lime units.

21. X-ray clinics, clinical/pathological laboratories, and scanning, and MRI testing enterprises.

22. All industries of mobile nature like rigs, concrete/tar mixing plants/hot-mix plants

including site-oriented plants/industries.

23. Units engaged in the manufacture of Chrysolite Asbestos (White Crystal).

24. All types of Saloon / Spas / Massage Centres etc.

25. All types of hotels/restaurants/resorts/amusement parks etc.

26. Vermi compost

27. Roof-top solar power generation

28. Bottling of LPG and other gases

29. Aggregators/supply chain business Enterprises related to/supporting bio-fuel manufacturing

units

Considering the contribution to the environment, the eligible subsidy will be extended to new

investments made in establishing ETPs.

Annexure 6: Zonal classification

To create a strong industrial base with equitable allocation of funds and for the overall

development of the State, the taluks are grouped based on backwardness in industrial

development. The classification of taluks is as follows:

Sl.

No. ^Districts

Total No. of

Talukas

Zone 1

Zone 2

Zone 3

Bengaluru (U)

Anekal

Bengaluru (N)

Bengaluru (S)

Yelahanka

Bengaluru (E)

Bengaluru (R)

Devanahalli

Doddaballapura

Hoskote

Nelamangala

Bengaluru (S)

(Ramanagara)

Magadi

Harohalli

Channapatna

Ramanagara

Kanakapura

Chitradurga

Holalkere

Chitradurga

Hiriyur

Challakere

Hosadurga

Molkalmuru

Davanagere

Channagiri

Davanagere

Jagalur

Harihar

Honnali

Nyamati

Chikkaballapura

Gudibande

Chintamani

Bagepalli

Gowribidanur

Chickaballapura

Siddlaghatta

Manchenahalli

Cheluru

Kolar

Srinivasapura

Kolar

Bangarpet

Malur

KGF

Mulbagal

Sl.

No. ^Districts

Total No. of

Talukas

Zone 1

Zone 2

Zone 3

Shivamogga

Soraba

Shivamogga

Sagar

Bhadravathi

Hosanagara

Shikaripura

ThirthahaIli

Tumakuru

Madhugiri

Tumakur

Turuvekere

Kunigal

Koratagere

Sira

Gubbi

Tiptur

Pavagada

Chikkanayakanahalli

10 Chamarajanagar

Yelandur

Gundlupet

Hanur

Chamarajanagar

Kollegal

11 Chikkamagaluru

Mudigere

Kadur

Shringeri

Chikkamagaluru

Koppa

Tarikere

Ajjampur

N R Pura

Kalasa

12 ^Dakshina

Kannada

Belthangadi

Bantwal

Puttur

Moodbidri

Sulya

Mangaluru

Ullal

Mulki

Kadaba

13 Hassan

Arakalgud

Hassan

Belur

Arasikere

Alur

C R Patna

H N Pura

Sakleshpura

14 Kodagu

Madikeri

Somwarpet

Virajpet

Ponnampete

Kushalnagar

15 Mandya

Pandavapura

Srirangapatna

Nagamangala

Mandya

Malavalli

Maddur

K R Pet

16 Mysuru

K R Nagara

Nanjangud

Hunsur

Mysuru

T Narisipura

Periyapatna

H D Kote

Saligrama

Saraguru

17 Udupi

Baindur

Karkala

Kapu

Udupi

Hebri

Kundapura

Bhramhavara

18 Bagalkote

Bilagi

Badami

Mudhol

Jamkhandi

Hunagund

Guledgudda

Rabakavi-Banahatti

Terdal

Ilkal

Bagalkote

19 Belagavi

Bailhongal

Belagavi

Soundathi

Chikkodi

Raibag

Khanapur

Ramdurg

Hukkeri

Athani

Gokak

Nippani

Kagavada

Mudalgi

Yaragatti

Kittur

20 Vijayapura

Sindgi

Indi

Muddebihal

B Bagewadi

Alamela

Babaleshwar

Nidagundi

Vijayapura

Tikota

Chedachana

Kolhar

Devarahipparagi

Talikote

21 Dharwad

Navalgund

Dharwada

Hubballi (U)

Hubballi (R)

Kalghatagi

Kundaghol

Annigeri

Alnavar

22 Gadag

Mundargi

Nargund

Ron

Shirahatti

Gajendragad

Lakshmeshwar

Gadag

23 Haveri

Savanur

Shiggaon

Hirekerur

Hanagal

Ranebennur

Byadagi

Rattihalli

Haveri

24 ^Uttara

Kannada

Honnavar

Sirsi

Mundagod

Yellapura

Siddapura

Haliyal

Joida

Bhatkal

Ankola

Kumta

Dandeli

Karwar

25 Ballari

Sandur

Ballari

Siraguppa

Kurugodu

Kampli

Bidar

Bhalki

Bidar

Humnabad

Basava Kalyana

Aurad

Chitaguppa

Hulusur

Kamala Nagar

27 Kalaburagi

Afzalpur

Kalaburagi

Aland

Jewargi

Sedam

Chittapur

Chincholi

Kalagi

Kamalapur

Yedrami

Shahabad

28 Yadgiri

Yadgiri

Shahapur

Shorapur

Hunasagi

Vadagera

Gurumitkal

29 Koppal

Kushtagi

Yelburga

Gangavathi

Kukkunur

Karatagi

Kanakagiri

Koppal

30 Raichur

Sindhanur

Raichur

Manvi

Arakera

Lingasugur

Devadurga

Maski

Siravara

Annexure 7: Abbreviations

Abbreviation

Full Form

ADR

Adverse Drug Reaction Reporting Centres

BESCOM

Bengaluru Electricity Supply Company Ltd

BIS

Bureau of Indian Standards

CAF

Common Application Form

CCC

China Compulsory Certificate

CNC

Conventional & Computerized Numerically Controlled

CSR

Corporate Social Responsibility

DGFT

Directorate General of Foreign Trade

DIC

District Industries Centre

10 DLSWCC

District Level Single Window Clearance Committee

11 DPIIT

Department for Promotion of Industry and Internal Trade

12 EC

Environment Clearance

13 EHTP

Electronic Hardware Technology Park

14 EODB

Ease of Doing Business

15 EPIP

Export Promotion Industrial Park

16 ETP

Effluent Treatment Plant

17 FAME

Faster Adoption and Manufacturing of Electric Vehicles

18 FAR

Floor Area Ratio

19 FDI

Foreign Direct Investment

20 FMCG

Fast Moving Consumer Goods

21 FSSAI

Food Safety and Standards Authority of India

22 GDP

Grodd Domestic Product

23 GMP

Good Manufacturing Practice

24 GoI

Government of India

25 GSDP

Gross State Domestic Product

26 GST

Goods & Services Tax

27 GTTC

Government Tool & Training Centre

28 ICD

Inland Container Depots

29 ICT

Information & Communication Technology

30 IoT

Internet of Things

31 IP

Intellectual Property

32 IT

Information Technology

33 ITI

Industrial Training Institute

34 JCCIB

Japan Chamber of Commerce and Industry

35 JETRO

Japan External Trade Organization

36 JICA

Japan International Cooperation Agency

37 JIT

Japanese Industrial Township

38 KIADB

Karnataka Industrial Area Development Board

39 KSIIDC

Karnataka State Industrial Infrastructure Development Corporation

40 KSSIDC

Karnataka State Small Industries Development Corporation Ltd

KUM

Karnataka Udyog Mitra

LAC

Land Audit Committee

MMLP

Multi Modal Logistics Parks

MSME

Micro, Small & Medium Enterprises

MTPA

Million-tonne per annum

OEM

Original Equipment Manufacturer

PPP

Public Private Partnership

PSU

Public Sector Undertaking

QMS

Quality Management Standards

R&D

Research & Development

SGST

State Goods & Services Tax

SHLCC

State High Level Clearance Committee

SLSWCC

State Level Single Window Clearance Committee

SPV

Special Purpose Vehicle

STP

Secondary Treatment Plant

ZED

Zero Effect Zero Defect

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Date: 2025.02.11 19:14:53 +05'30'