The financial outlay for the implementation of fiscal incentives and concessions for five years is ₹754.62 crore and ₹212.50 crore has been earmarked for government interventions such as scholarships and other schemes. | Photo credit: K. MURALI KUMAR
Karnataka will spend ₹967 crore on various incentives under the Karnataka Information Technology Policy 2025-2030, which seeks to bring in significant investment with a special focus on AI and other emerging technologies in cities outside Bengaluru and to elevate Karnataka’s brand globally as the “original AI destination”.
While 16 incentives, including nine newly added incentives, have been proposed for companies to be located in cities outside Bengaluru, six major incentives have been proposed for units to be located in Bengaluru.
Many types of support
Newly introduced incentives include faculty development support, recruiting assistance and compensation for talent relocations. The new policy covers operating expenses through electricity tax refund, property tax refund and telecom infrastructure development besides EPF refund, rental assistance and qualification cost refund for companies based outside Bengaluru.
Other incentives include reimbursement for internship costs, intellectual property incentive, support for faculty development programs, quality certification reimbursement, and electricity rebates, among others.
The financial outlay for the implementation of fiscal incentives and concessions for five years is ₹754.62 crore and ₹212.50 crore has been earmarked for government interventions such as scholarships and other schemes.
The proposed policy expands the scope to provide extension of benefits to Global Capacity Centers based in India operating or establishing a presence in Karnataka. It includes both new and expanding entities.
Increase in GSVA
The aim is to increase the IT sector’s contribution to Gross State Value Added (GSVA) from 26% to 36% and increase software exports from ₹ 4.09 crore to ₹ 11.5 crore by 2030, besides promoting investment in emerging cities such as Mysuru, Mangaluru, Tugaluru, Hubwadballi, KalaDballi, and Shivamogga.
To uplift the state’s IT and innovation ecosystem, the government is looking to establish ‘Technoverse’, integrated technology campuses under the upcoming Global Innovation Districts, through public-private partnerships. It will offer a future-ready technological ecosystem with advanced research and development laboratories, digital virtual test facilities and sector-focused innovation zones.
Digital networks
It aims to make the state with a future-ready digital network – Global Testbed Infrastructure Network and Statewide Digital Hub Grid – launch a scholarship for 1,000 mid-career female technical professionals, programs to bring back IT talent, set up a business-friendly cell and start a shared corporate transport – IT Corridor Bus Pooling.
Exception to the Standing Order
In non-fiscal support to the IT/ITeS unit in Karnataka, the policy exempts companies from the applicability of the Karnataka Industrial Employment (Standing Orders) Rules, 1946 for a period of five years with a relevant clause to protect women employees and prevent sexual harassment in the workplace. Companies will be able to self-certify compliance with applicable laws.
24/7 operation in three-shift operation and employment of women in all three shifts will be allowed. This is subject to the adoption of necessary measures with regard to safety and security, in addition to the provision of social, health and transport facilities.
Published – 13 Nov 2025 21:22 IST
