Karnataka Cabinet approves aerospace Policy, expecting bout ₹60,000 crore investment in five years

The State Cabinet on Wednesday approved the Karnataka Aerospace Policy 2026-2031, focusing on aerospace, defence, aviation and space research and development expecting about ₹60,000 crore investment over the next five years. 

To encourage private sector invstements and to provide capital subsidy, the government has classified focus areas and non-focus areas with zones. The capital subsidy has been fixed at 30% in zone 1 and 25% in zone 3. While the previous capital subsidy was between 1.75% and 2.25% in the previous policy in the non focus areas, it has been hiked to 25% now.

The Cabinet has also approved Textile and Apparel Policy 2026-2031, which for the first time has included silk industries and is expected to attract about ₹20,000 crore investments. “The government will be spending close to ₹4,000 crore on financial assistance and subsidies. As many as 33 focused taluks have been identified for investments and the government will provide help through credit linked capital subsidy and power subsidy among others,” Deputy Chief Minister G. Parameshwara said. 

The Start-Up Policy 2026-2030 was also approved by the Cabinet with a focus on the “government-first initiative”.  He said that the government would adopt the technologies quickly, and will involve innovation led public procurement. 

₹35 crore for AI hub

Among other Cabinet decision include India’s first drone-based testing facility at Chickballapur at a cost of ₹42.83 crore and a ₹35-crore AI hub that will act as a precursor to the AI University, which will initially come up in Indian Institute of Information Technology-Bengaluru. The AI hub will provide seed support, incubation, internship, mentorship and modular systems. 

The Cabinet also cleared an International Arbitration Centre in Bengaluru at a cost of ₹16 crore, which will also provide online facility.