Karnataka Industrial Policy (2020–25) — MSME & Large Incentives
Check your eligibility
Sign up and we'll tell you whether your startup qualifies for this grant.
Quick Answer
Karnataka: 10%–30% investment subsidy + stamp duty and electricity duty exemption for MSMEs
- Funding amount
- Varies
- Funding type
- Subsidy
- Provider
- Government of Karnataka
- Application deadline
- Rolling
- Location
- Karnataka
About this subsidy
Incentives by taluk Zone (Zone-1 most backward; Zone-4 most developed): (1) Investment promotion subsidy: 20%–30% of FCI for Micro; 15%–25% for Small; 10%–20% for Medium (higher in backward zones). (2) Interest subsidy: 3%–5% for MSMEs on term loans for 5 years. (3) Stamp duty and registration exemption (100% in Zone 1 & 2; 50% in Zone 3). (4) Electricity-duty exemption: 100% for 5 years in Zone 1 & 2. Priority sectors: aerospace & defence, EV, pharma, IT hardware, food processing, technical textiles.
Eligibility
See if you're eligible
Full eligibility criteria — entity type, stage, sector, founder profile and registration requirements — plus your fit for this program. Sign up to view.
Subsidy providers
The Government of Karnataka is the state government of India's leading technology and startup hub, home to Bengaluru — often called the country's Silicon Valley. Through the Department of Electronics, IT, BT and S&T and Karnataka Innovation and Technology Society (KITS), the…
Learn moreBenefits & Funding
What You Get
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.
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Application Process
- 1
Obtain free Udyam Registration at udyamregistration.gov.in.
Obtain free Udyam Registration at udyamregistration.gov.in.
You - 2
- 3
- 4
- 5
- 6
- 7
How to apply
Four steps from draft to disbursement — one action each.
- 1
Submit on the official portal
Use the official application link and verify all details before final submission.
- 2
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Frequently Asked Questions
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.
How do I apply?
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.
Sources
Data on this page is compiled from official program and provider references.
