The Karnataka Cabinet has approved the Aerospace Policy 2026-31, targeting ₹60,000 crore in investment and 60,000 jobs over five years.
The policy, cleared at a Cabinet meeting chaired by Chief Minister D.K. Shivakumar on 9 September, aims to establish the state as a global hub for advanced manufacturing and innovation in aerospace, defence and aviation. It categorises regions into focus areas and zones to steer structured incentives: Zone 1 will receive a 30% capital subsidy, Zone 2 will get 27.5%, and non-focus areas can receive a revised subsidy of up to 35%, raised from provisions in the 2022-27 policy.
Deputy Chief Minister G Parameshwara, who briefed reporters after the meeting, said the state wants balanced growth beyond Bengaluru. “We have included provisions in the policy to provide subsidy-based support to manufacturers who come forward for projects of this nature,” he said. The policy is expected to support major projects including Tata Advanced Systems’ planned aircraft manufacturing and Hindustan Aeronautics Limited’s production of Light Combat Aircraft.
The Cabinet also approved an Employment Fund Programme, branded Udyoga Nidhi, with a ₹300 crore allocation to encourage formal employment across 10 less-developed districts: Yadgir, Bidar, Koppal, Raichur, Kalaburagi, Vijayapura, Belagavi, Vijayanagara, Haveri and Gadag. Under the programme, eligible industries will receive up to ₹2,500 per employee annually for two years, linked to provident fund contributions.
Karnataka is already India’s leading aerospace and defence base, and the state government has framed the new policy as a way to spread that industrial capacity more evenly while deepening private-public partnerships. Alongside the aerospace package, the Cabinet cleared a Shramika Nivasa housing scheme for industrial workers and approved the return of student union elections in colleges and universities from the 2026-27 academic year.
