Karnataka aerospace & defence policy: To attract ₹60,000-cr investments in 5 years

Isha Rautela | Updated on: Jun 19, 2022
Karnataka Minister for Large and Medium Industries Murugesh Nirani

Karnataka Minister for Large and Medium Industries Murugesh Nirani | Photo Credit: MANJUNATH HS

Will develop five hubs; offer land and financial packages for manufacturers

The Karnataka industries department announced the new Aerospace and Defence Policy (2022–27), aiming for the State to be the preferred investment destination for aerospace and defence manufacturing. Under the new A&D policy, the state will develop five aerospace and defence hubs—Bengaluru, Belagavi, Mysuru, Tumakuru, and Chamarajanagara.

“The policy aims to attract investments worth ₹60,000 crore in the defence sector in the next five years, create over 70,000 employment opportunities and develop the state as a manufacturing hub. This includes maintenance, repair, and overhaul (MRO) and space applications for both the Indian market and exports, are some of the key features of the A&D policy, ”said Murugesh R. Nirani, Minister for Large and Medium Industries.

The policy is also focussed on setting up Defence Testing Infrastructure (DTI). “Lack of accessible testing infrastructure is the main impediment for the domestic A&D production units. The DTIs will be set up in the private sector with government assistance,” Nirani added.

Package of incentives

He also said that “Karnataka contributes a major share of 40 per cent of defence electronics systems/products. To give a further boost, the A&D policy offers huge land and financial incentives packages for space, defence and aerospace manufacturers and other sub-sector.”

The minister said that with Karnataka leading the Foreign Direct Investment (FDI) with over 40 per cent share in the country, there is no doubt that the State will be a hub for the defence and aerospace sectors.

The policy promotes A&D parks, which will have comprehensive infrastructure facilities for R&D, common training facilities, etc., and built-in space for all manufacturing companies and the government to provide courses in the A&D sector, he added.

Phase two of the A&D park is already under development in Haralur, near Bengaluru International Airport, on over 1,200 acres. Additionally, financial incentives have been earmarked for A&D park developers as per the Karnataka Industrial Policy (2020–25).

Nirani said that India’s current market size of approximately $7 billion is expected to grow at a compounded annual growth rate (CAGR) of 7.5 per cent to reach $15 billion by 2032, presenting a significant opportunity for defence electronics players in India to capitalise upon. The defence ministry has set a target of 70 per cent self-reliance in weapons by 2027, creating enormous prospects for industry players.

The policy comes ahead of the upcoming Global Investors Meet (GIM) scheduled for November 2, 3, and 4.

Published on June 19, 2022
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