Who can apply for Karnataka Industrial Policy 2020–25 incentives?

New manufacturing MSMEs and large industrial units in Karnataka are eligible, along with eligible expansion and diversification of existing units. The incentive quantum is determined by the taluk zone (Zone-1 most backward to Zone-4 most developed).

What investment promotion subsidy is available?

Micro enterprises receive 20%–30% of Fixed Capital Investment; Small enterprises 15%–25%; Medium enterprises 10%–20% — with higher rates in backward zones (Zone-1 and Zone-2). The exact rate depends on your taluk classification.

Is this scheme equity-free?

Yes. All benefits — investment promotion subsidy, interest subsidy, stamp duty exemption, and electricity duty exemption — are non-dilutive, non-repayable incentives.

Which sectors are prioritised?

Priority sectors include aerospace and defence, electric vehicles, pharmaceuticals, IT hardware manufacturing, food processing, and technical textiles. Units in these sectors may qualify for enhanced rates.

How does the stamp duty exemption work?

Units in Zone-1 and Zone-2 receive 100% stamp duty and registration exemption. Zone-3 units receive 50% exemption. Zone-4 units do not receive stamp duty concession under the standard policy.

Applications are submitted through the Udyog Mitra portal (udyogmitra.karnataka.gov.in). MSMEs can also apply through the Department of Industries and Commerce or through Karnataka Udyog Mitra single-window centres.

Karnataka Industrial Policy (2020–25) — MSME & Large Incentives

Karnataka Industrial Policy 2020–25 provides a zone-linked incentive package for manufacturing units. The investment promotion subsidy ranges from 10%–30% of Fixed Capital Investment depending on enterprise size (Micro to Medium) and taluk zone (Zone-1 most backward to Zone-4 most developed). Interest subsidy of 3%–5% on term loans is available for MSMEs for five years. Stamp duty and registration exemption is 100% in Zone-1 and Zone-2, and 50% in Zone-3. Electricity duty exemption of 100% for five years is available in Zone-1 and Zone-2. All incentives are equity-free and non-repayable. Priority sectors including aerospace, EV, pharma, IT hardware, food processing, and technical textiles attract additional benefits.

Karnataka Industrial Policy (2020–25) — MSME & Large Incentives

Karnataka Industrial Policy (2020–25) — MSME & Large Incentives

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