Karnataka set to tweak aerospace policy to attract investments

‘Focus of the govt. is on generation of employment in the State’

Karnataka is set to make necessary changes to its aerospace policy to enable further investments in the sector.

The proposed changes will be in line with the New Industrial Policy that was unveiled in 2020. The current aerospace policy, which was unveiled in February 2013 and runs up to 2023, was once modified in 2016 to attract investments in the maintenance, repair and overhaul segment. According to the government, the policy has so far yielded investments of ₹14,720 crore, generating employment for about 10,500 people in about 30 projects.

Intense competition

The changes also come at a time when Uttar Pradesh and Tamil Nadu, where defence corridors are proposed to be set up, are aggressively wooing investors in the aerospace and defence sectors.

Karnataka already has about 2,000 manufacturers related to defence and aerospace. As much as 65% of the country’s export are from Karnataka and 67% of all helicopter and aircraft production takes place in the State.

The Additional Chief Secretary, Industries and Commerce, Gaurav Gupta said the new industrial policy has identified aerospace and defence as focus sectors. “We are interested in the generation of jobs in the State, and will do what it takes. The policy has to be dynamic,” he said.

New avenues

The mega order that HAL received to produce 83 Tejas aircraft for the Indian Air Force at a cost of ₹48,000, he said, would bring investments and create jobs in the State. The opportunity also lies in the Indian government directing the substitution of $2.2 billion worth of import of spares and other items through local manufacturing. Prohibition of the import of 101 defence equipment would also spur indigenisation, he added.


When asked if there was any threat of new investments going to new defence corridors, Mr. Gupta said that “the immense talent pool in Karnataka and friendly policy” will attract investment into State.

‘Invest in tier 2 cities’

Industries Minister Jagdish Shettar on Thursday urged investors to consider tier 2 and tier 3 cities as Bengaluru has become saturated.

Speaking at a seminar on “Opportunity for aerospace and defence in Karnataka”, at Aero India here, Mr. Shettar said that all the cities were connected by highways and rail, and massive boost is being given for infrastructure development of tier 2 and tier 3 cities.

The minister led a high-level delegation to pitch the State before investors. Among those offered were development of airports on PPP basis in Ballari, Karwar, Chikamagaluru, Raichur Hassan.

The State is also coming up with a Bengaluru signature business park on 400 acres near international airport in Bengaluru for aerospace research and development. The plan will be ready in about four to six months.

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Sagar Biswas

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