§1Who it is for

  • Medium manufacturing enterprises (P&M Rs.10-50 crore per policy definition)

Useful if

Medium manufacturers with strong sales plans

Do not spend time on it if

Job-work-only units wanting PLI

§2Eligibility

  1. Same general conditions as micro/small (25% expansion rule, Kannadiga employment, negative list)
  2. PLI only on turnover of eligible manufactured products under separate GST registration; job work / composite tax / zero-GST products get only capital subsidy
  3. Existing units' turnover for the same product must not fall below pre-incentive 3-year average

§3Benefits

  • Capital subsidy: Zone 1 25% of VFA max Rs.10 crore; Zone 2 20% max Rs.8 crore; Zone 3 (Bengaluru Rural) 10% max Rs.4 crore - in 4 equal annual instalments
  • OR production-linked incentive: Zone 1 2.5% of net sales turnover (cap 60% of VFA); Zone 2 2.0% (cap 60% of VFA); Zone 3 1.0% (cap 30% of VFA) for up to 7 years
  • Backward taluks: capital subsidy +5% (max Rs.50 lakh) most backward / +3% (max Rs.25 lakh) more backward; PLI +5% / +3% of cap

§4Norms — pattern of assistance

  1. No carry-forward of PLI; ends at 7 years or VFA cap, whichever first

§5Documents

Tick each one as you get it ready.

First sale invoice

Power service letter

§6How to apply

  1. 1

    Choose capital subsidy or PLI while filing; choice is final for the approved investment

  2. 2

    Apply to DIC within 12 months of commercial production; PLI turnover per GSTR-9 Row 5N less non-operating income with GST auditor certificate (Annexure-12.10)

§7Pros and cons

Merits

  • Choice between upfront-style capital subsidy and turnover-linked PLI

Demerits

  • Capital subsidy spread over 4 years

→Related schemes

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Sources

  1. Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka

Checked on 18 October 2026. For information only — confirm with the department or bank. Spotted a mistake? Report it.