Karnataka’s cabinet has approved a new aerospace policy targeting ₹60,000 crore in investments over five years, with incentives aimed at expanding manufacturing and job creation across underserved regions and high-tech sectors.
Karnataka’s cabinet has cleared a new aerospace policy that aims to draw about ₹60,000 crore of investment over five years and strengthen the state’s position in aerospace, defence, aviation and space research and development.
According to The Hindu, the Karnataka Aerospace Policy 2026-2031 is designed to make private investment more attractive through a revised subsidy structure that distinguishes between focus and non-focus areas. In the most favoured zones, the capital subsidy has been set at 30%, while it is 25% in zone 3. The policy also sharply raises support in non-focus areas, where the previous rate of 1.75% to 2.25% has been lifted to 25%.
The cabinet’s approval comes alongside a broader package of industrial policies. The Hindu reported that the textile and apparel policy for 2026-2031, which now includes silk industries for the first time, is expected to attract roughly ₹20,000 crore in investment and come with close to ₹4,000 crore in financial assistance and subsidies. Deputy Chief Minister G. Parameshwara said 33 focused taluks had been identified and that support would include
The same cabinet meeting also signed off on the Start-Up Policy 2026-2030, which Parameshwara said would follow a “government-first initiative” and speed up the adoption of new technologies through innovation-led public procurement. The administration also approved an India’s first drone-based testing facility at Chickballapur, a ₹35-crore artificial intelligence hub that will act as a precursor to an AI university at the Indian Institute of Information Technology-Bengaluru, and an International Arbitration Centre in Bengaluru.
Moneycontrol and The New Indian Express reported that the aerospace policy also targets 60,000 jobs and is intended to spread manufacturing beyond Bengaluru, with incentives aimed at backward districts and other underserved areas. Those reports said the government is also offering extra support such as a per-employee incentive and worker-housing provisions to help attract industry to less-developed parts of the state.
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