Karnataka’s new industrial policy eyes investments of Rs 7.5 lakh crore and 20 lakh jobs in 5 years

Balanced growth across Karnataka

• To achieve regional industrial balance, the policy classifies districts into three zones:
• Zone-1 and Zone-2: Includes industrially backward taluks and districts, which will receive differential incentives to attract investments.
• Zone-3: Covers Bengaluru Urban and Rural districts with a distinct incentive structure to encourage investments in other regions.

Speaking about the policy’s focus, Large and Medium Industries Minister M B Patil said, “This classification ensures targeted support for industries in less developed areas, preventing overconcentration in Bengaluru.”

Key sectors for growth

The policy identifies several priority sectors, including aerospace and defence, electronics, steel, cement, warehousing and logistics, textiles, future mobility, green hydrogen, industrial robots, drones, medical technology, space technology, biotechnology, renewable energy, pharmaceuticals, automobiles, FMCG, and tourism.

Four pillars of the policy

The industrial policy is built on four key pillars:

1. Financial incentives: investors can choose between capital subsidy and production-linked incentives (PLI).
2. Infrastructure development: encourages PPP collaborations, development of “green industrial areas”, and affordable housing for workers in ultra-mega investments.
3. Ease of doing business: simplifies the single-window system, making industrial permits and approvals more efficient.
4. Human capital development: strengthens industry-government-academia collaboration and introduces new curriculums in ITIs and polytechnics to create a future-ready workforce.

MSME empowerment & inclusive growth

According to the policy, a major push has been given to micro, small and medium enterprises, with a 30 per cent land allocation in industrial areas and 24.1 per cent reserved for SC/ST entrepreneurs. The government will provide MSMEs with support through:

• Affidavit-based approvals for faster clearances.
• Vendor development conclaves and marketing support.
• Technology upgradation assistance and cluster development.
• MSME Manufacturing Excellence Awards to encourage innovation.

Innovation & sustainability

The policy promotes green initiatives, including incentives for sustainable industrial practices and the development of green industrial areas. Additionally, it encourages research and innovation aimed at strengthening Karnataka’s research and development ecosystem, boosting startups, and establishing KWIN City (Knowledge, Wellbeing & Innovation City) as a hub for research and healthcare.

“The Industrial Policy 2025-30 lays a strong foundation for Karnataka’s industrial future. With a focus on sustainability, regional balance, MSME growth, and innovation, it aims to generate large-scale employment and economic opportunities,” minister Patil said.