§1Policies

§2Incentive pattern

Capital subsidy10-35% of VFA by zone, size and category

Micro 30%/25%/10% (special 35%/30%/15%) with caps Rs.30/25/10 lakh (special Rs.35/30/15 lakh); small 25%/20%/10% caps Rs.200/150/50 lakh (special 30%/25%/15%, Rs.225/175/75 lakh); medium 25%/20%/10% caps Rs.10/8/4 Cr or PLI 2.5%/2.0%/1.0% of net sales for 7 years; plus 5%/3% in most/more backward taluks

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
Stamp duty100% in Zones 1-2; Zone 3 75% special only; registration Rs.1 per Rs.1,000

Reimbursement in lieu of exemption until Stamp Act amended (operative guidelines)

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
Electricity duty100% electricity tax exemption 6-8 years (Zones 1-2); Zone 3 special 4 years

Zone 1: 7 yrs general / 8 yrs special; Zone 2: 6 / 7; Zone 3: nil / 4

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
Power tariffRs.1.00 per unit for 3 years (micro & small, Zones 1-2)

Claims every 6 months (June, December)

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
LandLand conversion fee 100% reimbursed (Zones 1-2); 30% KIADB land reserved for MSMEs

Zone 3: nil general / 75% special

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
Patent & quality50% of quality certification cost up to Rs.5 lakh

ISO, BIS, FSSAI-AGMARK, ECOMARK, ZED, ISI, FPO, BEE etc.; claims to KCTU

ICAI MSME & Startup Committee - Karnataka State MSME Policy 2026 (secondary)
Export / freightExport-readiness certification 50% up to Rs.5 lakh

CE, CCC, phyto-sanitary, IFS-BRC-FSSC 22000, SEDEX, GHP, GMP, GLP, HACCP

ICAI MSME & Startup Committee - Karnataka State MSME Policy 2026 (secondary)
EmploymentEmployment is a condition, not a cash incentive, for MSMEs

70% Kannadigas overall and 100% in Group D; lower employment reduces capital subsidy/PLI proportionately

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
OtherSustainability incentives 50% of green equipment cost, capped at 10% of VFA; recycling/waste-to-energy 50% up to Rs.5 Cr

See ka-ip-2025-sustainability

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

§3State schemes

More incentives in the policy (10)

Name and benefit are from the policy; the full conditions are not on this page yet — see the policy document.

  • Land conversion fee reimbursement (MSMEs)Zone 1-2: 100%; Zone 3: nil general / 75% special - after commercial production
  • KIADB/KSSIDC land reservation30% of KIADB allottable land for MSMEs; 24.1% SC/ST; 5% women; KSSIDC 100% for MSMEs
  • SC/ST land/shed at subsidised cost75% subsidised cost (max 2 acres / 1 shed)
  • SC/ST bank loan subsidy60% subsidy (max Rs.5 lakh) for loans up to Rs.10 lakh
  • SC/ST soft seed capitalInterest-free loan at 50% of promoter contribution (project cost up to Rs.10 Cr)
  • SC/ST private industrial estates50% cost assistance, max Rs.5 Cr, for estates of at least 10 acres
  • SC/ST power subsidyRs.2 per unit for 5 years for new enterprises (from 01-04-2017)
  • Vendor Development Conclave, MSME Excellence Awards, artisan support, digital matchmaking portalNon-financial support
  • Employment booster / R&D co-location booster incentives (large units)Additional % on capital subsidy/PLI (7.5%/10%/15% bands) - large and above
  • Logistics & warehousing capital subsidy; dormitory incentivePer operative guidelines (large and above / SLC)

§4District zones

In many states the subsidy rate changes with the zone of the district or block.

ZoneZone 3 (9 taluks)

Lowest: capital subsidy 10% (special 15%) only in Bengaluru Rural district; no stamp duty, land conversion, electricity tax or power subsidy for general category

Bengaluru Urban: Anekal, Bengaluru (N), Bengaluru (S), Yelahanka · Bengaluru Rural: Bengaluru (E), Devanahalli, Doddaballapura, Hoskote, Nelamangala

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
ZoneZone 2 (32 taluks)

Micro 25%, small 20%, medium 20% capital subsidy; full stamp duty and conversion fee; electricity tax 6 years (special 7); Rs.1/unit power

Bengaluru South (Ramanagara): Harohalli, Ramanagara · Chitradurga: Chitradurga, Challakere · Davanagere: Davanagere, Harihar · Chikkaballapura: Chintamani, Gowribidanur · Kolar: Kolar, Malur · Shivamogga: Shivamogga, Bhadravathi · Tumakuru: Tumakur, Kunigal, Sira, Tiptur · Chikkamagaluru: Kadur, Chikkamagaluru · Dakshina Kannada: Bantwal, Moodbidri, Mangaluru · Hassan: Hassan, Arasikere, C R Patna · Mandya: Srirangapatna, Mandya, Maddur · Mysuru: Nanjangud, Mysuru · Udupi: Karkala, Udupi, Kundapura

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
ZoneZone 1 (199 taluks)

Highest: micro 30%, small 25%, medium 25% capital subsidy; electricity tax 7 years (special 8)

All taluks not listed in Zone 2 or Zone 3 (Annexure 3 total: 240 taluks = 199 + 32 + 9)

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
ZoneMost backward taluks - Dr D.M. Nanjundappa Report (39)

Additional 5% of VFA: micro max Rs.5 lakh, small max Rs.10 lakh, medium max Rs.50 lakh; PLI +5% of cap

Bellary: Sandur · Vijayanagara: Kudalgi, Harapanahalli · Bidar: Bhalki, Humnabad, Basavakalyan, Aurad · Kalaburagi: Sedam, Chittapur, Afzalpur, Aland, Chincholi, Jevargi · Yadagiri: Shorapur, Yadgir, Shahapur · Koppal: Kushtagi, Yelaburga · Raichur: Sindhanur, Manvi, Lingasugur, Devdurga · Bagalkot: Bilagi · Vijayapura: Muddebihal, Basavana Bagevadi, Indi, Sindagi · Bengaluru South (Ramanagara): Kanakapura, Magadi · Chitradurga: Hosadurga · Davanagere: Channagiri · Chikkaballapur: Bagepalli · Tumakuru: Kunigal, Madugiri, Gubbi, Sira, Pavagada · Chamarajanagara: Chamarajanagar · Mysuru: H D Kote

Karnataka Operative Guidelines, Package of Incentives and Concessions under Industrial Policy 2025-30 (CI 123 SPI 2024, 10.04.2026), Invest Karnataka
ZoneMore backward taluks - Dr D.M. Nanjundappa Report (40)

Additional 3% of VFA: micro max Rs.3 lakh, small max Rs.5 lakh, medium max Rs.25 lakh; PLI +3% of cap

Bellary: Siraguppa · Vijayanagara: H.B. Halli, Huvina Hadagali · Koppal: Koppal · Raichur: Raichur · Bagalkot: Hunagund, Badami · Belagavi: Athani, Gokak, Soundatti · Dharwad: Kalaghatgi · Gadag: Mundaragi · Haveri: Savanur, Shiggon, Hirekerur · Uttar Kannada: Supa (Joida), Bhatkal · Chitradurga: Hiriyur, Molakalmuru, Holalkere, Challakere · Davanagere: Honnali, Jagalur · Kolar: Mulabagalu · Chikkaballapur: Gudibande, Gowribidanuru · Shivamogga: Soraba · Tumakuru: Turuvekere, Koratagere, C.N Halli · Chamarajanagara: Gundlupet, Kollegal · Chikkamagalur: Kadur · Hassan: Arakalgud · Mandya: Malavalli, Nagamangala, Krishnarajpet · Mysuru: Hunsur, T Narasipura, Nanjanagudu

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

→Industrial land in this stateAgency, portal, allotment, lease

§5Famous for

§6Choose your district

For each district: its ODOP product, its subsidy zone and the schemes that run only there.

§7Focus sectors & ODOP

ESDMAdvanced manufacturingAerospace and defenceFuture mobility / EVTextiles and garmentsBiotechnologyRenewable energyFood processingPharmaceuticals

§8Why do business here — and why not

Merits

  • Clear zone tables push 199 of 240 taluks to the top incentive tier (Annexure 3)
  • Single window: district committee up to Rs.15 crore, state above (ICAI summary of policy)
  • Operative guidelines publish full document checklists per incentive (10.04.2026)

Demerits

  • Stamp duty and electricity tax exemptions under IP 2025-30 not yet operative pending Stamp Act amendment / Energy Dept notification (operative guidelines 10.04.2026)
  • Subsidy released by seniority subject to fund availability
  • 70% Kannadiga employment rule with recovery on non-compliance

Still being researched

We could not confirm these points from an official source, so no figure is printed on the page.

Open items6 points pending
  • Main policy PDF (IndustrialPolicy2025_PrintPagesSingle_.pdf) linked but — see the official guideline.; figures taken from operative guidelines
  • Quality/export certification 50% / Rs.5 lakh rate seen only in ICAI summary
  • Sustainability incentive cap: Rs.50 lakh (ICAI) vs Rs.1 Cr (operative guidelines table) - unresolved
  • No separate Karnataka MSME/startup scheme (e.g., self-employment) researched within budget
  • No ODOP/cluster list collected
  • ka-ip-2025-quality-export-cert: rate source secondary