• As per the report published by DIPP the FDI inflows in Karnataka for the year 2016-17(April’16 – December’16) (In US$ Millions) is 1,697 and the percentage of total inflows is 7.
• Karnataka is the seventh largest Indian state by area covering 191,976 square kilometres (74,122 sq mi), or 5.83% of the total geographical area of India.
• With 61,130,704 inhabitants at the 2011 census, it is the eighth largest state by population, comprising 30 districts.
• Karnataka is bordered by the Arabian Sea and the Laccadive Sea to the west, Goa to the north west, Maharashtra to the north, Telangana to the North east, Andhra Pradesh to the east, Tamil Nadu to the south east, and Kerala to the south west.
• Karnataka has Airports at Bengaluru, Mangalore, Belgaum, Hubli, Hampi, Bellary and Mysore. Railway network has total length of approximately 3,089 kilometres. There are 11 ports, including the New Mangalore Port, a major port and ten other minor ports.
• Karnataka has an installed power generation capacity of about 14,159 MW of which about 6,158 MW is from thermal power generation, 3,600 MW from hydel power, 3,571 MW from renewable energy sources and 500 MW from other sources (nuclear and diesel).

Department of Industries and Commerce

• The Department of Industries and Commerce acts as a catalyst for development of the industries. The department formulate and implements policies with a view to promote investment and trade.
• Some of the crucial infrastructure projects facilitated by the Department include
  • Agro Export zones
  • Bengaluru International Airport, etc.
  • Electronic city
  • Export Promotion Industrial Parks
  • Food and Agro-technology parks
  • Growth Centers across the State
  • International Technology Park Ltd.
  • Special Economic Zones

Karnataka Industrial Area Development Board (KIADB)

KIADB developed 145 Industrial Areas spread over 33,513 acres across the State and has allotted lands to over 16,960 units. KIADB has also acquired 44,704 acres of land in favour of 437 units under SUC scheme.

Karnataka Udyog Mitra (KUM)

• Karnataka Udyog Mitra (KUM) is an initiative from the State to promote and facilitate investments, and assist investors. It is the secretariat for grant of approvals and sanction of infrastructure facilities for approved projects:
• KUM has been appointed the nodal agency at State level and has District Industries Centers at the District level to undertake investment promotional activities.
• It is a ‘single point of contact’ for all investors who are looking at setting up businesses in Karnataka. Its role is to facilitate investments and execute initiatives to enable a smooth transition, from receiving an investment proposal to the eventual implementation of the project.

Single Window Clearance

• Single Window Clearance committee was constituted to be the single point clearance under Karnataka Industries (Facilitation) Act, 2002 for facilitating new investments and to consider and clear projects.



• State High Level Clearance Committee	INR 100 crore and above
  State Level Single Window Clearance Committee	Between INR 15 crores -INR 100 crores
  District Level Single Window Clearance Committee	Less than INR 15 crore

• Combined Application Form (CAF) has been introduced in order to reduce the number and duplication of application forms required to be filed at entry level.
• Self-Certification has been introduced by the entrepreneurs, which shall be accepted by the departments and authorities for purpose of issuing clearance and granting benefits to the entrepreneurs.
• eBiz Karnataka portal provides facilities for applying clearances and approvals from various department and there is facility of tracking of applications online.

Aerospace Policy

• Anchor Unit Subsidy of Rs. 500 lakhs to be offered to the first ten Aerospace OEM enterprises with a minimum investment of Rs 50 crore and direct employment of 100 persons established during the policy period.
• Exemption from Stamp Duty and Concessional Registration Charges.
• 100 % Exemption from Electricity duty.
• Interest free loan on VAT to be extended to all Aerospace enterprises.
• Reimbursement to the extent of 75% Central Sales Tax (CST) paid by all Aerospace Enterprises over a period of 5 years.
• 100% Entry Tax Exemption shall be available to all Aerospace Enterprises.
• Allotment of undeveloped lands at concessional rates.

Biotech Policy

• Financial assistance to biotechnology industrial units for patent tracking and patent registration of up to 50% of the cost of registration.
• Financial support of up to 50% on the expenditure incurred on certification procedures.
• Dedicated power lines that are exempt from power cuts.
• Setting up of Venture Capital funds for biotech industries with private participation.
• Special incentive and concession package for the companies having zero discharge certificate for pollution control.

Electronics-Hardware Policy

• Investment promotion subsidy based on size and zone located in.
• Exemption from Stamp Duty in respect of loan agreements, credit deeds, mortgage, hypothecation deeds and lease deeds.
• Concessional registration charges at the rate of Rs 1 per Rs 1000.
• Waiver of conversion fee for converting the land from agriculture use to industrial use.
• 100% exemption on Entry Tax on Plant & Machinery and Capital Goods.
• One time capital subsidy of up to 50% of the cost of Effluent Treatment Plant.
• Interest free loan on VAT for all new large and mega manufacturing Enterprises.
• Anchor unit subsidy of Rs. 100 lakhs for the first two manufacturing enterprises.
• Interest Subsidy at 5% on term loans.
• 100% exemption from Electricity Duty.

Information and Communication Policy

• Setting up of Research Hub to encourage entrepreneurs and startup companies.
• Setting up of IT Investment Region.
• Investment promotion subsidy based on size and zone located in.
• Exemption from Stamp Duty in respect of loan agreements, credit deeds, mortgage, hypothecation deeds and lease deeds.
• Concessional registration charges at the rate of Rs 1 per Rs 1000.
• Waiver of conversion fee for converting the land from agriculture use to industrial use.
• 100% exemption on Entry Tax on Plant & Machinery and Capital Goods.
• One time capital subsidy up to 50% of the cost of Effluent Treatment Plant.
• Interest free loan on VAT for all new large and mega manufacturing Enterprises.
• Unlimited back up power and permission for captive power generation.
• Refund of Certification Charges.

Semiconductor Policy

• Investment promotion subsidy based on size and zone located in.
• Exemption from Stamp Duty in respect of loan agreements, credit deeds, mortgage, hypothecation deeds and lease deeds.
• Concessional registration charges at the rate of Rs 1 per Rs 1000.
• Waiver of conversion fee for converting the land from agriculture use to industrial use.
• 100% exemption on Entry Tax on Plant & Machinery and Capital Goods.
• One time capital subsidy of up to 50% of the cost of Effluent Treatment Plant.
• Interest free loan on VAT for all new large and mega manufacturing Enterprises.
• Anchor unit subsidy of Rs. 100 lakhs for the first two manufacturing enterprises.
• Interest Subsidy at 5% on term loans.
• 100% exemption from Electricity Duty.
• Refund of cost incurred for preparation of Project Report.

Solar Policy

• Tax concessions in respect of entry tax, stamp duty and registration charges.
• Pro rata reduction in Contract Demand on a permanent basis to be allowed to Industrial Consumers opting to buy power from Solar Power Project.
• Various concessions allowed viz central excise duty & custom duty to project developer.
• Project execution without waiting for formal approval on filing application for conversion of agriculture land for setting up of Solar Power Projects.
• Exemption from obtaining clearances from Pollution Control Board.

Special Economic Zone Policy

• All purchases from domestic tariff area shall be exempted from State and Local body taxes or levy of any other cess.
• Following Exemption are available
  • Stamp Duty and Registration fees for registration of land or loan /credits documents.
  • Electricity Duty or Tax on sale of self-generated power.
  • 1% Labour Welfare Cess on construction cost.
  • Any other states tax, levies, cess or duties.
• One time capital subsidy up to 50% of the cost of Effluent Treatment Plant.

• The State has been a preferred destination for investment attracting 4th largest FDI in the country. Karnataka is the manufacturing hub for some of the largest public sector industries in India, including Hindustan Aeronautics Limited, National Aerospace Laboratories, Bharat Heavy Electricals Limited, Indian Telephone Industries, Bharat Earth Movers Limited and HMT. There are about 1054 large & medium manufacturing industries in various sectors which include Machine Tool, Steel, Cement, Automotive and Aerospace industries.
• There are 2500 IT companies including 700 MNCs, 600 Textile units and a large Agro based industries.
• The State is home to major automotive industries such as Toyota Kirloskar, Volvo, Honda Motors, TVS, Tata-Marco polo, L&T Komatsu, Mahindra Reva, Scannia, Bosch, Siemens, JK Tyres etc.
• It is biotech Capital of India and is home to nearly 60% India’s biotech units. It has planned dedicated Biotechnology parks and centers. Key players include Biocon, Glaxo Smith Kline Pharmaceuticals Ltd., Jubilant Life Sciences Ltd. and Astra Zeneca India.
• Many of India’s premier science and technology research centers, such as Indian Space Research Organization, Central Power Research Institute, Bharat Electronics Limited and the Central Food Technological Research Institute are also headquartered in Karnataka. Mangalore Refinery and Petrochemicals Limited is an oil refinery located in Mangalore.
• Focus sectors of the state with very high growth potential include:
  • Aerospace
  • Agro & Food processing
  • Bio-Technology and Electronics
  • Defence and Heavy Engineering
  • Energy including Renewable Energy
  • Information Technology
  • Infrastructure
  • Machine Tools
  • Manufacturing including Automobile
  • Smart Cities and Urban Infrastructure
  • Textiles& Garments
  • Tourism