Subsidy
Karnataka Industrial Policy 2025-30 - MSME Incentives
Karnataka Industrial Policy 2025-2030 aims to attract ₹7.5 lakh crore investments and create 20 lakh jobs by 2030. Offers zone-based capital subsidies (10-40%), special category incentives (max ₹35 lakh), 100% stamp duty exemption, employment generation incentives, women employment bonuses, and sustainability support. Positions Karnataka as Asias top high-tech manufacturing destination.
Quick Info
Department:
Department of Commerce and Industries, Government of Karnataka
Amount Range:
₹500,000 - ₹100,000,000
Processing:
80 days
Benefits
✅ CAPITAL EXPENDITURE SUBSIDY (Zone-based):
• Zone 1 (Backward): 25-40% of fixed assets
• Zone 2 (Developing): 20-30% of fixed assets
• Zone 3 (Developed): 10-25% of fixed assets
• Or Production-Linked Subsidy option
• Company can choose best model
✅ SPECIAL CATEGORY SUBSIDY:
• For SC/ST/Women/Minorities/PWD/Ex-servicemen entrepreneurs
• Maximum: ₹35 Lakh (increased from ₹30 lakh)
• Additional benefit over base subsidy
✅ STAMP DUTY EXEMPTION:
• Zone 1: 100% exemption
• Zone 2: 100% exemption
• Zone 3: No exemption
• For loan agreements, mortgage, hypothecation deeds
• Executed with govt/banks/financial institutions
✅ REGISTRATION CHARGES EXEMPTION:
• ₹1 for every ₹1,000 (Zones 1 & 2)
• Significant cost reduction
✅ EMPLOYMENT GENERATION INCENTIVE:
• 7.5% extra for 3-4x minimum employment
• 10% extra for 4-5x minimum employment
• 15% extra for 5x+ minimum employment
• Rewards job creation
✅ WOMEN EMPLOYMENT INCENTIVE:
• 7.5% extra for 50%+ women workforce
• 10% extra for 60%+ women workforce
• 15% extra for 70%+ women workforce
• Promotes gender diversity
✅ SUSTAINABILITY INCENTIVES:
• Effluent Treatment Plant: 50% of cost (Max ₹2.5 Crore)
• Mandatory rainwater harvesting (Small and above)
• Water body restoration (Medium and above)
• Green technology support
✅ LOGISTICS & WAREHOUSE:
• Specific capital subsidies introduced
• Based on minimum thresholds
✅ SINGLE WINDOW SYSTEM:
• Revamped digital platform
• Improved ease of doing business
• Fast-track approvals
NOTE: Karnataka targets to be Asias top high-tech manufacturing hub with focus on innovation, sustainability, and inclusive growth
• Zone 1 (Backward): 25-40% of fixed assets
• Zone 2 (Developing): 20-30% of fixed assets
• Zone 3 (Developed): 10-25% of fixed assets
• Or Production-Linked Subsidy option
• Company can choose best model
✅ SPECIAL CATEGORY SUBSIDY:
• For SC/ST/Women/Minorities/PWD/Ex-servicemen entrepreneurs
• Maximum: ₹35 Lakh (increased from ₹30 lakh)
• Additional benefit over base subsidy
✅ STAMP DUTY EXEMPTION:
• Zone 1: 100% exemption
• Zone 2: 100% exemption
• Zone 3: No exemption
• For loan agreements, mortgage, hypothecation deeds
• Executed with govt/banks/financial institutions
✅ REGISTRATION CHARGES EXEMPTION:
• ₹1 for every ₹1,000 (Zones 1 & 2)
• Significant cost reduction
✅ EMPLOYMENT GENERATION INCENTIVE:
• 7.5% extra for 3-4x minimum employment
• 10% extra for 4-5x minimum employment
• 15% extra for 5x+ minimum employment
• Rewards job creation
✅ WOMEN EMPLOYMENT INCENTIVE:
• 7.5% extra for 50%+ women workforce
• 10% extra for 60%+ women workforce
• 15% extra for 70%+ women workforce
• Promotes gender diversity
✅ SUSTAINABILITY INCENTIVES:
• Effluent Treatment Plant: 50% of cost (Max ₹2.5 Crore)
• Mandatory rainwater harvesting (Small and above)
• Water body restoration (Medium and above)
• Green technology support
✅ LOGISTICS & WAREHOUSE:
• Specific capital subsidies introduced
• Based on minimum thresholds
✅ SINGLE WINDOW SYSTEM:
• Revamped digital platform
• Improved ease of doing business
• Fast-track approvals
NOTE: Karnataka targets to be Asias top high-tech manufacturing hub with focus on innovation, sustainability, and inclusive growth
Eligibility Criteria
• Must be Micro, Small, or Medium Enterprise as per MSMED Act, 2006
- Valid Udyam Registration Certificate
- New industrial investment projects OR expansion
- Manufacturing and specified service sectors
- Located in Karnataka (zone classification applies)
- Mandatory Kannada workforce requirements:
- 70% Kannadigas overall (optional, subject to policy finalization)
- 100% Kannadigas in Group D (non-managerial) positions (optional)
- Contract labour not to exceed 40% of total workforce
- For expansion: Minimum 25% additional investment
- Compliance with environmental regulations
- For Medium and above: Mandatory rainwater harvesting
- For Large investments: Water body restoration required
- Must generate minimum employment as per category
- Special category eligibility:
- SC/ST entrepreneurs
- Women entrepreneurs
- Minorities
- Physically challenged individuals
- Ex-servicemen
- Valid Udyam Registration Certificate
- New industrial investment projects OR expansion
- Manufacturing and specified service sectors
- Located in Karnataka (zone classification applies)
- Mandatory Kannada workforce requirements:
- 70% Kannadigas overall (optional, subject to policy finalization)
- 100% Kannadigas in Group D (non-managerial) positions (optional)
- Contract labour not to exceed 40% of total workforce
- For expansion: Minimum 25% additional investment
- Compliance with environmental regulations
- For Medium and above: Mandatory rainwater harvesting
- For Large investments: Water body restoration required
- Must generate minimum employment as per category
- Special category eligibility:
- SC/ST entrepreneurs
- Women entrepreneurs
- Minorities
- Physically challenged individuals
- Ex-servicemen
Required Documents
Udyam Registration Certificate (Mandatory)
Aadhar Card of proprietor/partners/directors
PAN Card of enterprise
Project report with zone classification
Land documents (purchase/lease)
Building plans and approvals
Fixed assets list and valuation
Environmental clearance certificate
Rainwater harvesting system plan (if applicable)
Water body restoration plan (if applicable)
Employment details and projections
Kannada workforce percentage commitment
Contract labour percentage details
Special category certificate (SC/ST/Women/Minority/PWD/Ex-servicemen if applicable)
Partnership deed/MOA-AOA/Company registration
Bank account details
Loan agreements/mortgage deeds for stamp duty exemption
Sustainability initiatives documentation
Women employment percentage plan (if claiming incentive)
Manufacturing license
Pollution control clearance
Declaration on company letterhead
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Scheme Details
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