Karnataka Cabinet Approves Aerospace Policy 2026-31

Karnataka's Cabinet gave the green light to the Aerospace Policy 2026-31 on September 9, 2026. Deputy CM G Parameshwara shared the details right after the Cabinet meeting, calling it a big push to turn the state into a real aerospace manufacturing hub over the next five years.

Key Highlights of the Aerospace Policy 2026-31

1. Targets and goals: The policy runs from 2026 to 2031 and aims to pull in Rs 60,000 crore worth of investments while creating 60,000 jobs.
2. Capital subsidies: Zone 1 projects get a 30% capital subsidy, other zones get different rates, and anything falling outside focus areas can claim up to 35%.
3. AI hub: An Artificial Intelligence Hub will kick off at IIIT-Bangalore before eventually moving to the state's upcoming AI University, offering training, internships, and startup support.
4. Drone testing facility: A dedicated drone testing site is coming up too more on that below.
5. Infrastructure and worker housing: Under the Shramika Nivasa scheme, big companies must build 10,000 houses for workers near industrial sites in phase one, backed by land from KIADB.
6. Network grid: A grid plan spanning 172 taluk-level planning zones will add ring roads around district and taluk headquarters to ease congestion.
7. Farmer scheme: The Negila Yogi Scheme, launched with Rs 150 crore, offers free cultivation help to small farmers holding up to three acres, starting as a pilot across 31 taluks.

India's First Drone-Based Testing Facility at Chikkaballapur

Karnataka says this will be the country's first facility of its kind. Located in Chikkaballapur, it will offer proper testing airspace and structured flight trials, giving drone makers a way to move their tech out of labs and into real commercial use.

Karnataka Targets Rs 60,000 Crore Investment and 60,000 Jobs

The state is banking on existing aerospace momentum, including aircraft manufacturing by Tata and HAL's production line for 97 Light Combat Aircraft, to help meet these investment and employment goals.

Rs 2,500 Employment Incentive in Backward Districts

An Employment Fund Programme, backed by Rs 300 crore, will pay industries Rs 2,500 per worker every month for two years, tied to PF contributions, across ten backward districts including Kalaburagi, Bidar, and Raichur