Karnataka: Defence and aerospace policy by December, says industries minister

The government is also coming up with a defence and aerospace park on 1,200 acres of land. Enhanced incentives will be offered to micro small and medium enterprises (MSME) to provide a level playing field, said minister Murugesh Nirani.

Karnataka will introduce a defence and aerospace policy by the end of December. The government is also coming up with a defence and aerospace park on 1,200 acres of land, which it claims is the first in the country.

Large and Medium Industries Minister Murugesh Nirani told The Indian Express that a draft of the policy is ready.

“Karnataka is the first state in the country to come up with a defence and aerospace park. We are coming up with another defence and aerospace park which is called Phase II. Karnataka is the hub for defence and aerospace. Defence manufacturing industries are most welcome. There are several things about the policy which we cannot speak about due to the model code of conduct in place but by the end of next month we will announce it officially,” he said.

“Karnataka was the first state to announce an aerospace and defence Policy. Karnataka was the first and only state to exempt the aerospace and defence sector from lockdown rules during the Covid-19 Pandemic and allow manufacturing,” he said.

“Although the current aerospace and defence policy is valid till 2023, we are taking a proactive approach to update our policy to provide a key push for this important sector. Enhanced incentives will be offered to micro small and medium enterprises (MSME) to provide a level playing field and make them competitive as part of the new aerospace and defence policy,” Nirani said.

Gunjan Krishna, commissioner for industrial development, apprised that the upcoming policy would concentrate on getting the original equipment manufacturer (OEM). “They can either do the manufacturing themselves or work in partnerships. We are giving them incentives. Maintenance, repair and operations (MRO) and space sectors are growing. So we are also looking at creating clusters not only in Bengaluru but other parts of the state like Chamarajnagar, Chitradurga and Tumkuru. Hindustan Aeronautics Limited (HAL) is building a helicopter manufacturing complex at Tumkuru.”

Speaking on the sidelines of the two-day Lockheed Martin Suppliers Conference (November 10-11), the minister said: “Karnataka is a leading state in India with a strong industrial base. Our Gross State Domestic Product (GSDP) is approximately Rs 17 lakh crore and accounts for the highest total exports among all states in India.”

The state has garnered more than Rs 1 lakh crore worth investments since the beginning of the Covid-19 pandemic in March 2020.

“25% of India’s aircraft and spacecraft industry is based in Karnataka. More than 67 per cent of all aircraft and helicopter manufacturing for defence services is done in Karnataka. The state contributes 65 per cent of India’s aerospace-related exports. The state is home to more than 2,000 small and micro enterprises along with 70 per cent of India’s supplier base which executes subcontracting work for the defence public sector undertakings (PSU),” Nirani said.

The minister said that the aerospace and defence sector is complemented by a strong ancillary support ecosystem in Karnataka with the state being a leader in machine tools, heavy electric machinery, electronic systems design & manufacturing (ESDM) and software.

“We also have an aerospace-focused special economic zone by Aequs in Belagavi which has been operational for over 10 years with more than 6,500 employees working in the campus in various sectors of aerospace, defence and engineering products,” he added.

Dr EV Ramana Reddy, additional chief secretary, commerce & industries, said: “We have many other incentives like a capital subsidy for anchor industries, stamp duty exemption and so on. Moreover, the Karnataka Land Reforms Act was also amended. Earlier, any industry which wanted to purchase land directly there were impediments since several government clearances were required. Now, there is a single window for clearance and the industry can purchase land from private developers. This was done keeping ease of doing business in mind.”

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