Karnataka Cabinet approves aerospace policy 2026-31, targets Rs 60,000 crore investment

Bengaluru , September 11 : Karnataka Cabinet on Wednesday (Sep 9) approved the Karnataka Aerospace Policy 2026-31, targeting investments of around Rs 60,000 crore in aerospace, defence, aviation and space-related sectors through government and private participation.

 

 

Karnataka Deputy Chief Minister G Parameshwara said the policy aims to establish the state as a major centre for aerospace manufacturing and innovation.

 

“This intends to establish Karnataka as a centre of manufacturing and innovation in aerospace, defence, aviation and space. This aims an investment of Rs 60,000 crore in a phased manner. It will have both private participation and government investment,” Parameshwara said at a press conference after the Cabinet meeting.

 

Under the new policy, the government will create focus and non-focus zones to provide incentives to private companies.

 

Companies investing in focus zones will be eligible for a capital subsidy of up to 30 per cent, while those in non-focus zones will receive a subsidy of up to 25 per cent.

 

Parameshwara said the incentives are significantly higher than those offered under the earlier 2022-27 policy, where subsidies ranged between 1.75 per cent and 2.25 per cent.

 

 

 

He pointed to upcoming aerospace manufacturing projects as examples of the sector’s growth. Tata Advanced Systems is planning to manufacture 40 aircraft at the HAL centre in Bengaluru in association with Hindustan Aeronautics Limited (HAL). There is also a plan to manufacture 97 Light Combat Aircraft (LCA).

 

The Cabinet also approved the establishment of a drone testing facility in Chikkaballapura, with Rs 42.83 crore allocated for the project.

 

Parameshwara described it as a first-of-its-kind initiative in the country and highlighted the growing use of drones in areas such as medicine delivery and defence.

 

“Drone technology is advancing a lot. In Bengaluru, medicines are being delivered through drones. It may even lead to the delivery of people. Such tests are already going on,” he said.

 

 

He also pointed to the growing importance of drones in modern warfare, saying their use during the Iran-America conflict showed how important the technology has become in the defence sector.

 

The facility was initially sought for Tumakuru but was shifted to Chikkaballapura due to lack of space.

Besides, the Cabinet also approved the Shramik Nivas programme, aimed at providing housing facilities for labourers close to their workplaces.

 

Under the programme, large industries will be encouraged to provide 10,000 houses for workers employed by them. Companies will receive subsidies and will have to follow a set of government-prescribed parameters while constructing the houses.