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The Karnataka Cabinet, chaired by Chief Minister D.K. Shivakumar, approved the Karnataka Aerospace Policy 2026-31 on 9 September 2026.
The policy targets ₹60,000 crore of investment and 60,000 jobs over five years across aerospace, defence, aviation and space R&D, and aims to spread the sector beyond Bengaluru.
The same Cabinet meeting cleared India's first state-led drone-testing facility at Chikkaballapur at an estimated ₹42.83 crore.
The Shramika Nivas scheme will build 10,000 houses for industrial workers near their workplaces in its first phase, with land support from the Karnataka Industrial Areas Development Board.
Investment incentives of up to 10% in backward taluks and up to 20% in most backward taluks were approved, graded by the backwardness classification of the M. Govinda Rao committee.
Attract ₹60,000 crore of investment and create 60,000 jobs in aerospace, defence, aviation and space R&D over five years
Key: Zone-wise capital subsidies designed to push the industry beyond Bengaluru into other districts
House industrial workers close to their workplaces
Key: 10,000 houses in the first phase, built by companies with state subsidy and land support from KIADB
Strengthen the state's startup ecosystem and open government demand to young firms
Key: Eligible startups may pitch technology solutions worth up to ₹25 lakh directly to state departments
Make hiring cheaper for industry and raise formal employment
Key: ₹2,500 per worker hired, paid for two years, alongside the employer's EPF contribution
State agency that acquires and develops industrial land; provides land support for the Shramika Nivas housing
Classified all 236 taluks of Karnataka by backwardness; its grading determines the incentive slabs. It submitted its final report on 31 January 2026 and found 93 taluks 'most backward', with backwardness concentrated in North Karnataka
Defence public sector undertaking under the Ministry of Defence; the anchor of Karnataka's aerospace base
General Awareness > State Schemes and Policies
General Awareness > State Economy and Investment News
State policy covering aerospace, defence, aviation and space R&D, targeting ₹60,000 crore of investment and 60,000 jobs in five years.
Karnataka scheme to build housing for industrial workers near their workplaces, 10,000 units in phase one.
Karnataka Industrial Areas Development Board, the state's industrial land acquisition and development agency.