Karnataka Aerospace Policy 2026–2031

Why in News?

The Karnataka Cabinet approved the Karnataka Aerospace Policy 2026–2031 on 9 September 2026. The policy aims to attract ₹60,000 crore in investment and create 60,000 jobs over five years. The policy seeks to expand Karnataka’s aerospace, defence, aviation, space technology, drone, and avionics ecosystem beyond Bengaluru.

Karnataka Aerospace Policy 2026–2031

Karnataka already has a strong aerospace and defence manufacturing base, particularly in Bengaluru. The new policy aims to decentralise this ecosystem by encouraging companies to establish facilities across the state. It covers:

• Aerospace and aircraft manufacturing
• Defence production
• Aviation
• Space technology
• Drones
• Avionics
• Advanced manufacturing and related industries

The government will provide different incentives depending on project location and category. Projects in identified focus areas will receive capital subsidies, while non-focus areas can receive higher support in some cases. Zone 1 projects have been reported as eligible for a 30% capital subsidy.

Major Aerospace Manufacturing Projects

The policy builds on Karnataka’s existing aerospace ecosystem. Tata Advanced Systems is associated with the production of 40 Airbus C295 aircraft in India under the Make in India programme. The programme includes structural manufacturing and final assembly in India. Hindustan Aeronautics Limited (HAL) is producing 97 LCA Mk1A aircraft for the Indian Air Force under a ₹62,370-crore contract signed in 2025. The programme includes 68 fighter aircraft and 29 twin-seat aircraft. These projects strengthen Karnataka’s role in India’s indigenous aerospace and defence manufacturing ecosystem.

Drone Testing Facility in Chikkaballapur

The Cabinet approved a dedicated drone testing facility at Jedarahalli in Chintamani taluk, Chikkaballapur district. The facility has an estimated cost of ₹42.83 crore and will support testing and development of advanced drone technologies. It is intended to provide infrastructure for field testing and validation of unmanned aerial systems, including applications in disaster management, healthcare, and other public services.

Artificial Intelligence Hub

The Cabinet also approved a ₹35-crore Artificial Intelligence Hub at IIIT-Bengaluru. The hub will provide:

• AI training
• Internships
• Mentorship
• Practical projects
• Case studies
• Startup and incubation support

It is expected to serve as a precursor to the proposed AI University in Karnataka.

Shramika Nivas Housing Scheme

The Cabinet approved the Shramika Nivas scheme to provide housing near workplaces for industrial workers. Initially, around 10,000 houses are proposed. The initiative aims to improve access to affordable housing for workers employed in industrial areas.

Government-First Startup Initiative

The Cabinet also approved a Government First initiative under Karnataka Startup Policy 2025–30. The initiative seeks to make the state government an early adopter of emerging technologies through innovation-led public procurement. Technologies such as artificial intelligence, satellite imagery, geospatial analytics, robotics, early-warning systems, and last-mile connectivity can be adopted for public-sector applications.

Significance of the Policy

The Karnataka Aerospace Policy 2026–2031 has three major objectives:

1. Attract large-scale investment in aerospace and advanced manufacturing.
2. Create employment through new industrial projects.
3. Decentralise industrial development beyond Bengaluru.

The policy can also strengthen India’s domestic aerospace supply chain and support the broader Aatmanirbhar Bharat objective in defence manufacturing.

Karnataka Aerospace Policy 2026–2031: Important Facts