New policy: Karnataka eyes USD 6 billion investment in aerospace & defence sector in 5 years

05:27 PM Aug 29, 2022 | PTI |

Bengaluru: The Karnataka government has come out with a new Aerospace and Defence policy with a package of incentives and concessions aimed at attracting investment to the tune of Rs 45,000 crore (USD six billion) in five years.


The policy 2022-2027 also has an objective to create additional 60,000 jobs (direct and indirect) during this five-year period.

The package includes certain investment promotion subsidy, and exemption from stamp duty and concessional registration charges, according to a government order issued on August 26.

Karnataka has been a leader in aerospace & defence industry due to the presence of a strong ecosystem. ”As much as 25 per cent of India’s aircraft and spacecraft industry is based in Karnataka, where 67 per cent of all aircraft and helicopters manufacturing for Defence services is done,” say Commerce and Industries Department officials. The State contributes to 65 per cent of the country’s aerospace-related exports, they say.

Karnataka has significant potential to further grow as a leading state in the sector due to several advantages including expertise in aerospace with more than 2,000 SMEs and the presence of 70 per cent of India’s supplier base which execute niche sub-contracting work for defence PSUs.


Bengaluru, being recognised as the Silicon Valley of India, has a number of top companies in IT/ ITES and electronics hardware, many of them being a part of the supply chain to the aerospace sector.

Karnataka has the maximum number of engineering graduates in the country, with a large number of them employed in IT, design & engineering affirming advantageous positions with reference to skillsets. The new policy aims to develop Karnataka as the aerospace & defence manufacturing hub including MRO and space applications for both Indian market and exports, and to strengthen R&D infrastructure for developing innovative and cutting-edge technologies, officials said.


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