Bengaluru: Karnataka is betting big on becoming India’s aerospace manufacturing hub, but the govt’s new Aerospace Policy 2026-31 comes with a catch — only the first three investors in each of the seven proposed clusters will get the land subsidy on offer.However, the govt has defended the cluster-based approach, saying it will “promote balanced regional growth” while strengthening the state’s competitiveness and building future-ready infrastructure.The policy promises a subsidy of up to 50%, but it is capped at three anchor investors per cluster. This means companies which come in later will have to pay the full price. Four of the seven clusters — Vijayapura, Shivamogga, Mysuru and Hassan — will double as manufacturing hubs with runway access, allowing companies to test their products on site. All four already have smaller airports under the Udaan scheme.The remaining three are an avionics cluster in Jangamakote in Bengaluru Urban, a space cluster in Chitradurga, and a UAV and Urban Air Mobility cluster in Chikkaballapura.Spelling out the subsidy structure, the policy states: “To incentivize anchor investors and catalyze cluster development, the first three investments in each of the proposed clusters, once notified, shall be eligible for a land cost subsidy, as follows: 50% land cost subsidy for all clusters beyond Bangalore and 25% land cost subsidy for clusters in Bangalore Urban and Rural.”According to the policy, Jangamakote will lean on Bengaluru’s electronics ecosystem and existing defence base to focus on avionics, while Chitradurga’s proximity to the Isro Aeronautical Test Range makes it a natural candidate for the space cluster. Chikkaballapura is earmarked for UAVs and urban air mobility systems.Private developers of Aerospace and Defence parks will also get incentives under the Karnataka Industrial Policy, provided they develop a minimum of 50 acres.The policy addresses a long-standing complaint from private players — the lack of easy access to testing infrastructure. The govt will fully fund two new common testing and certification facilities, adding to the one already planned at the Devanahalli Aerospace and Defence Park.Testing infrastructure for the sector is capital intensive and requires constant upgrades, making it unviable for individual companies to build their own facilities in-house. This has forced private players to wait up to 4-6 months just to get their products tested. “Therefore, common testing facilities established with support of the government shall prove to be beneficial for private companies,” the policy states.The two new facilities will come up at locations chosen based on industry demand and regional requirements, following consultations with stakeholders. The govt may also rope in an industry association or a suitable operator to assess needs and run the facilities once ready.QUOTE BOX:Taking the aerospace ecosystem beyond Bengaluru can significantly deepen Karnataka’s position in global aerospace manufacturing. The opportunity now is to translate this ambition into greater manufacturing depth, technology capability and participation of Indian companies in global aerospace supply chains. Karnataka has the talent, engineering capability and industrial foundation to lead the next phase of growth.Aravind Melligeri | executive chairman & CEO | Aequs+++Karnataka is well positioned to become a globally significant aerospace design and technology hub. It should create opportunities across aerospace and defence manufacturing, space, drones, avionics and emerging technologies. The govt has worked closely with industry in developing the policy. Now, it must be about moving beyond build-to-print and focusing on capability, technology, design, advanced manufacturing and higher value addition.Dr S Dwarakanath | director general, Aerospace India Association
