Karnataka unveils new industrial policy; introduces GenAI assistant for single-window system

The Government of Karnataka launched its new industrial policy for 2025-30 at the inaugural session of Invest Karnataka 2025, the global investor meet being held in Bengaluru. The new policy aims to generate employment for nearly 2 million people by 2029 and accelerate manufacturing by targeting an annual growth of 12% and attracting investment of nearly ₹7.5 lakh crore into the sector. It also focusses on sectors such as electronics system design and manufacturing (ESDM), advanced manufacturing, aerospace and defence, and future mobility.  Chief minister Siddaramaiah said that the state, which accounts for nearly 60% of the country’s electronics exports, is positioning itself as the hub for semiconductor manufacturing with companies such as Intel, Micron, and TSMC committing investments in the area. “Karnataka is investing in AI-driven governance, blockchain adoption, and a good computing ecosystem to future-proof the digital economy,” he said.  

The new policy announced by the state government has incentives for investors and companies. For instance, investors get to choose options such as production-linked incentives (PLI) with high capital expenditure and a one-time capital subsidy for companies that follow sustainability initiatives such as zero liquid discharge, air pollution control, energy efficiency, and electrification of thermal processes. Companies with GreenCo certification—that rates a firm on sustainability parameters—will also be eligible to receive additional incentives. A 20% capital subsidy will also be provided on fixed capital investment for warehousing projects, along with stamp duty reimbursement and electricity duty exemption for five years. Being the leader in global capabilities centres (GCCs), Karnataka will also incentivise companies with an additional 10% incentive for those that co-locate their R&D centres or GCCs, along with manufacturing units.  

Additionally, special incentives have been introduced for companies with higher female workforce participation and those setting up units in more backward regions. Addressing the housing needs of workers in manufactuing units, industrial dormitories will also receive incentives of up to ₹1 crore capital subsidy or PLI for every 1,000-person accommodation. Speaking on the new policy and urging investors to invest beyond the capital city, deputy chief minister D.K. Shivakumar said, “We are giving a lot of opportunities to the younger generation, and incentives. We are not only looking at Bengaluru, but beyond Bengaluru. We have identified the backward districts and taluks and we want to give more incentives for those who set up production units [there].”   

Karnataka has also revamped its single-window system for investors by introducing the Udyog Mitra Assistant (UMA)—a multilingual GenAI chatbot to provide real-time assistance on policies, approvals, and incentives to investors. The new single window system (SWS) is also mobile-optimised, integrated with over 150 business services from more than 30 state departments and agencies, and investors can get in-principle approvals at either the district or state level through an online Common Application Form (CAF). SWS will also introduce an online affidavit-based clearance to allow investors in the manufacturing sector to begin construction and preparatory activity, eliminating the wait time to start operations. The single window portal has also been integrated with the Land Management System of the Karnataka Industrial Areas Development Board (KIADB) to check on land availability, allotment, and building plan-related approvals. With a complete digital approach and real-time dashboards and service-level agreement (SLA) monitoring, the system will also help the government track approval status, and identify and resolve problems. The government aims to clock ₹10 lakh crore in investments during the three-day summit being held in the state capital.