Karnataka unveils new industrial policy to become top investment destination

Bengaluru: Deputy Chief Minister D K Shivakumar on Tuesday unveiled Karnataka’s Industrial Policy 2025-30 at the inaugural event of Invest Karnataka 2025 summit here.

The policy aims to position the state as the top destination for high-technology manufacturing investments in Asia.

Speaking on the occasion, Shivakumar said the policy focuses on equitable and sustainable development, targeting Rs 7.5 lakh crore in investments and aiming to generate 20 lakh new jobs during the policy period.

A key objective is to ensure balanced growth across regions by promoting industrial development beyond Bengaluru, particularly in backward areas, he added.

Highlighting the key features of the policy, Large and Medium Industries Minister M B Patil said, "To achieve this objective, the policy classifies districts into three zones. Zone-1 and Zone-2 include industrially backward taluks and districts, which will receive differential incentives to encourage investments." Bengaluru Urban and Rural districts fall under Zone-3, which has a different incentive structure to ensure targeted support for industries in less developed areas, Patil explained.

A statement issued by the minister’s office said the policy identifies key focus sectors that will drive economic development and job creation across Karnataka.

These key sectors include aerospace and defence, electronics, core manufacturing (steel, cement, metals), warehousing and logistics, textiles, global capability centres, future mobility, green hydrogen, industrial robots, drones, augmented reality/virtual reality, medical technology, space technology, biotechnology, renewable energy, pharmaceuticals, automobiles, capital goods, FMCG, and tourism.

The policy offers financial incentives by allowing investors to choose between Capital Subsidy and Production-Linked Incentives.

"The policy ensures world-class infrastructure by promoting Public-Private Partnership collaborations and supporting dormitories and affordable housing for ultra-mega investments," Patil was quoted, as saying.

To enhance ease of doing business, the government has revamped the Single Window System with simplified processes for industrial permits and approvals, the minister explained.

"Additionally, the policy focuses on human capital development by fostering industry-government-academia collaboration. It introduces short-term and long-term curricula for ITIs and polytechnics to create a future-ready workforce," Patil noted.

The policy promotes sustainability by developing Green Industrial Areas and incentivizing green initiatives by investors, the statement said.

It also boosts innovation by strengthening the research and development (R&D) and startup ecosystem while establishing KWIN City (Knowledge, Wellbeing & Innovation City) as a hub for knowledge, healthcare, innovation, and research, it added.

Further, the policy ensures inclusive development by strengthening the Micro, Small, and Medium Enterprises (MSME) ecosystem through infrastructure support, incentives for women entrepreneurs, and industrial cluster development in backward regions.

Additionally, it reinforces governance through regular monitoring to ensure transparency and seamless execution, the statement read.

"Providing a major push for MSMEs, the policy introduces an affidavit-based (ABC) approval system and a simplified Single Window Clearance System to streamline approvals. It earmarks 30 per cent of industrial area land for MSMEs, with 24.1 per cent of alloted land reserved for SC/ST entrepreneurs," the statement said.

According to the policy, the government will also support MSMEs through vendor development conclaves, marketing support in public procurement, technology upgradation assistance, skill development initiatives, MSME Manufacturing Excellence Awards, and cluster development programmes.

The policy also offers attractive incentives and concessions to encourage industrial growth and entrepreneurship.

"The Karnataka Industrial Policy 2025-30 sets a clear roadmap for the state’s industrial future. With a strong emphasis on sustainability, regional balance, MSME empowerment, and innovation, the policy aims to keep Karnataka at the forefront of industrial growth. It is expected to create widespread employment and economic opportunities across the state," Patil emphasised.