New Industrial Policy 2020-25-Incentives and Concessions

The Karnataka Industrial Policy 2020-25 is issued by the Government of Karnataka via the Department of Industries & Commerce. The purpose of the policy is to attract investment into manufacturing, technology & industry, create employment (target ~2 million jobs), promote balanced regional growth and support MSMEs and large enterprises. The benefit to your business: depending on your scale, location , sector and investment, you may access a mix of fiscal incentives and non‐fiscal enablers to improve viability and competitiveness.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Zone-based incentive structure delivering higher benefits for backward/less-developed areas.
Investment Promotion Subsidy for manufacturing/industrial units.
Stamp Duty & Registration Fee concessions and land conversion‐fee reimbursements.
Power/electricity tariff subsidies and duty exemptions.
Interest subsidy / credit-linked subsidies for technology upgradation/SME credit.
Support for large, mega, ultra-mega enterprises with higher thresholds and special incentives.
Sectoral focus & thrust areas .
Emphasis on MSMEs: smaller scale units get higher percentage benefits; special category entrepreneurs (women, SC/ST, persons with disabilities) get enhanced benefits.
Time-bound benefits from date of commercial production/commissioning; lock-in commitments required.

Financial Assistance

Component	Assistance Provided	Detailed Explanation & Example
Investment Promotion Subsidy	% of value of fixed assets or link to turnover, e.g., up to 30 % in favourable zone for small units.	Example: You invest ₹ 50 lakh in fixed assets in a Zone 1 taluk; if policy gives subsidy say 25% of VFA = ₹ 12.5 lakh subsidy over the benefit period.
Stamp Duty & Registration Fee Concession	50-100% exemption or reimbursement depending on zone & category.	Example: You buy land for industrial unit and pay ₹ 10 lakh stamp duty; if 100% exemption applies, you save full ₹ 10 lakh.
Land Conversion Fee Reimbursement	Full or partial reimbursement of fee for converting agriculture land to industrial use.	Example: You pay ₹ 8 lakh conversion fee; you may get entire ₹ 8 lakh back .
Electricity / Power Tariff Subsidy	On power tariff/duty or reimbursement per unit for a number of years.	Example: Your unit consumes 1 million kWh a year; if subsidy is ₹ 1 per unit for 5 years, you may get ₹ 10 lakh per year reimbursed.
Interest Subsidy / Credit Linked	Subsidy on interest rate for specified number of years for MSME loans.	Example: You borrow ₹ 30 lakh at commercial interest rate; policy gives 3% interest subsidy for 5 years reducing cost.

Eligibility Criteria

Who can apply:

The unit must be a manufacturing enterprise in Karnataka under the policy period unless extended.
Location of project in one of the zoned districts/talukas (Zone 1/2/3) as per annexure in policy.
Compliance with employment norms, use of local workforce, environment or clearances, beginning commercial production as defined. India Briefing
Special category units (women-owned, SC/ST, minority, ex-service, physically challenged) may receive higher subsidy rates.

Documents Required

Project proposal and application filled.
Company registration/incorporation certificate.
Fixed asset investment details.
Location agreement/land allotment/lease.
Power connection / utility bills.
Stamp duty/registration receipts.
Employment records, audited financials (for turnover/production linked benefits).

Application Process for the Scheme

Option 1: Apply with Bullit

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.
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Option 2: Apply via Karnataka Udyog Mitra / Single Window System

Register your enterprise: Visit the Single Window System Portal and create a login using your Udyam or company credentials.
File Combined Application Form: Fill the CAF specifying investment details, location , employment, land requirement, and subsidy types requested.
Obtain In-Principle Approval: Your proposal is reviewed by the District/State Level Single Window Clearance Committee . Approved projects receive an In-Principle Sanction Letter.
Implement Project & Start Operations: Begin construction, procure machinery, and start commercial production within the approved period.
Claim Incentives: After production begins, log in to the Karnataka Udyog Mitra portal → “Incentive Claim” section → upload documents like invoices, bank statements, electricity bills, or registration proof.
Verification & Disbursement: After field verification by DIC or nodal agency, eligible subsidies and reimbursements are credited directly to your registered bank account.