Karnataka to have new aerospace and defence policy by end of year: Nirani

Although Karnataka’s aerospace and defence policy is valid until 2023, the state is planning to push an updated policy into place as early as the end of December.

Speaking at the inaugural session of Lockheed-Martin’s 8th Annual Suppliers Conference in the city on Wednesday, Large and Medium Industries Minister Murugesh Nirani said the new policy will be introduced as part of the government’s “proactive approach to update our policy to provide a key push for this important sector.”

Officials said that the new policy, which is still in the draft stage, could be unveiled at the end of next month. Although details of the new policy are sketchy, Nirani specified that “enhanced incentives will be offered to MSMEs to provide a level playing field and make them competitive as part of the new A&D policy.

He added that the government is also in the process of setting up a 1,200-acre defence and aerospace park in Devanahalli, which may also be officially announced at the end of December.

The new policy would also concentrate on drawing original equipment manufacturers (OEM) to the state, added Gunjan Krishna, Commissioner, Department of Industries and Commerce. “We are looking to create clusters not only in Bengaluru but other parts of the state like Tumkuru where the helicopter complex under Hindustan Aeronautics Limited (HAL) is coming up, Chamarajnagar and even Chitradurga which is turning into an important hub for units of the Defence Research and Development Organisation (DRDO),” she said.

She clarified that OEMs interested in coming to the state will be provided incentives. Moreover, they can choose to carry out manufacturing activities by themselves or work in partnerships, she added.

Dr E V Ramana Reddy, Additional Chief Secretary, Commerce and Industries, noted the updated policy will arrive amid incentives such as “a capital subsidy for anchor industries, stamp duty exemption. Moreover, the Karnataka Land Reforms Act was also amended. Earlier, any industry which wanted to purchase land directly there were impediments since several government clearances were required. Now, there is a single window for clearance and the industry can purchase land from private developers. This was done keeping ease of doing business in mind.”

Nirani, meanwhile, noted that Karnataka is already leading the realm when it comes to a strong industrial base. “Our Gross State Domestic Product (GSDP) is approximately Rs. 17 lakh cr and accounts for the highest total exports among all states in India,” he said.

He also disclosed that Karnataka had secured more than Rs 1 lakh cr-worth of investments since the beginning of the pandemic in March 2020. “Karnataka was the [also] first and only state to exempt Aerospace and Defence Sector from lockdown rules during the Covid pandemic and allow manufacturing,” he added.

As per data shared by the minister, some 25% of India's aircraft and spacecraft industry is based in Karnataka. More than 67% of all Aircraft and Helicopters manufacturing for Defence services is done in Karnataka and Karnataka contributes to 65% of the country's aerospace related exports from India. “We are home to more than 2,000 Small and micro enterprises along with 70% of India’s supplier base which execute subcontracting work for the Defence PSUs,” he said.

Officials at the event also noted that the state’s aerospace and defence sector is complemented by a strong ancillary support ecosystem present with Karnataka being a leader in Machine Tools, Heavy electric machinery, Electronic systems design & manufacturing (ESDM) and Software.

“We are first in the production of machine tools with Bengaluru alone producing 60% of the total value of machine tools manufactured in India. Karnataka is the second highest producer of Special purpose and Heavy Electrical machinery in India and with presence of 85+ Chip designing companies, Karnataka is the largest chip design hub in the country,” Nirgani said.

“We also have an aerospace focused special economic zone by Aequs in Belagavi which has been operational for the last 10+ years with more than 6500 employees working in the campus in various sectors of Aerospace, Defence and engineering products,” he added.

The minister noted that Karnataka was the first state to announce the Aerospace and Defence Policy.

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