Karnataka’s new industrial policy for 2025-2030 is likely to link incentives to job creation, sustainable practices and increasing women's employment.
State Commerce and Industries Department sources told Moneycontrol that the new policy would prioritise employment-based incentives. “Job generation will be central to the policy. Companies investing and creating jobs will receive higher incentives. Companies with higher participation of women in the workforce will receive further incentives,” said a senior official.
The policy is expected to benefit micro, small and medium enterprises, which are among the largest job creators in India. “We are focused on creating maximum employment opportunities, particularly in sectors such as FMCG, electronics, footwear and leather goods. FMCG, for instance, plays a crucial role in employment, and we plan to offer incentives not only for job creation but also for increased women employment,” the official said.
The policy will also focus on emerging sectors expected to contribute to the economy, such as electric vehicles, artificial intelligence, automation and robotics. The new industrial policy is likely to be unveiled during the three-day Global Investors Meet - Invest Karnataka at Palace Grounds, Bengaluru, from February 12-14. Officials have already held meetings with industry leaders and vision groups, and the draft policy is near finalisation.
Also read: Karnataka to conduct Global Investors Meet in Bengaluru from Feb 12-14 next year
Karnataka has vision groups for nine sectors, including aerospace, defence, machine tools, electronics system design and manufacturing (ESDM), pharmaceuticals, and core manufacturing sectors such as steel and cement. The policy will also promote future mobility, green hydrogen, food processing, textiles, warehousing and logistics.
The policy also includes plans to attract industries beyond Bengaluru, with a roadmap to establish the Knowledge, Wellbeing & Innovation (KWIN) City, a futuristic 5,800-acre metropolis 50 km from the city centre, between Dobbaspet and Doddaballapur.
Incentives for green practices
Karnataka will also promote environmental, social and governance (ESG) investments. With renewable energy making up 63 percent of Karnataka’s power sector, the government seeks to reward companies adopting sustainable manufacturing practices. “The US and European countries require green manufacturing, and we will incentivise local manufacturers who adopt such processes,” said the official.
The draft policy also emphasises research and development. “Our new industrial policy, aerospace and defence policy, data centre policy and employment policy aim to develop clusters across sectors, drawing more industries to the state,” the official said.
Karnataka is also planning to overhaul its investment promotion agency. “We are revamping the IKF (Invest Karnataka Forum) with three main goals: becoming a $1-trillion economy by 2032, promoting ‘Beyond Bengaluru’ initiatives, and creating 25 lakh jobs within five to seven years,” said Karnataka Minister for Large and Medium Industries MB Patil.
Patil said sectors like FMCG play a crucial role in employment creation. " We’re introducing incentives to support job generation, with additional incentives for companies employing more women in the new policy."
“Karnataka is also upgrading industrial parks and is in discussions with two Singaporean companies to set up net-zero industrial parks in Bengaluru. In line with mandates from European and global corporations, we aim to promote greener industrial practices in Karnataka,” said Patil.
He acknowledges challenges, particularly with the single-window clearance system. “We are committed to addressing these issues. We’ve engaged Microsoft to streamline the single-window process and bring all departments under one roof. Delays in environmental clearances, pollution control, revenue and land acquisition impact businesses significantly. A dedicated group of ministers will work to address the needs of industries, as time is money for all,” he said.
He said the industries department is availing loans for land acquisition and classification and also to provide dedicated water supply from the Cauvery for industrial parks around Bengaluru.
“We are planning to set up startup parks in regions like Belagavi and Hubballi, with flexible options for land acquisition, leasing or rental to ensure no startup faces barriers,” said Patil.
Also read: Karnataka to set up 'vision groups' for 7 sectors to drive Industrial growth
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