Bengaluru: Karnataka is betting big on becoming India’s aerospace manufacturing hub, but the govt’s new Aerospace Policy 2026-31 comes with a catch — only the first three investors in each of the seven proposed clusters will get the land subsidy on offer.
The policy promises a subsidy of up to 50%, but it is capped at three anchor investors per cluster. Spelling out the subsidy structure, the policy states: “To incentivize anchor investors and catalyze cluster development, the first three investments in each of the proposed clusters, once notified, shall be eligible for a land cost subsidy, as follows: 50% land cost subsidy for all clusters beyond Bangalore and 25% land cost subsidy for clusters in Bangalore Urban and Rural. Private developers of Aerospace and Defence parks will also get incentives under the Karnataka Industrial Policy, provided they develop a minimum of 50 acres. This has forced private players to wait up to 4-6 months just to get their products tested.
Jangamakote will lean on Bengaluru’s electronics ecosystem and existing defence base to focus on avionics, while Chitradurga’s proximity to the Isro Aeronautical Test Range makes it a natural candidate for the space cluster, according to the policy. “Therefore, common testing facilities established with support of the government shall prove to be beneficial for private companies,” the policy states. This means companies which come in later will have to pay the full price. Four of the seven clusters — Vijayapura, Shivamogga, Mysuru and Hassan — will double as manufacturing hubs with runway access, allowing companies to test their products on site. All four already have smaller airports under the Udaan scheme. Chikkaballapura is earmarked for UAVs and urban air mobility systems. The policy addresses a long-standing complaint from private players — the lack of easy access to testing infrastructure. The govt will fully fund two new common testing and certification facilities, adding to the one already planned at the Devanahalli Aerospace and Defence Park. Testing infrastructure for the sector is capital intensive and requires constant upgrades, making it unviable for individual companies to build their own facilities in-house. Karnataka is well positioned to become a globally significant aerospace design and technology hub. It should create opportunities across aerospace and defence manufacturing, space, drones, avionics and emerging technologies. The govt has worked closely with industry in developing the policy. Now, it must be about moving beyond build-to-print and focusing on capability, technology, design, advanced manufacturing and higher value addition.