The New Industrial Policy 2020-25 outlines investment promotion subsidies for enterprises according to their scale of production, turnover, and whether they are operated by persons belonging to special categories. With... An Introduction to Doing Business in India 2020 will provide readers with an overview of the fundamentals of i... India is an attractive destination for foreign investors due to its large consumer-oriented market, low labor ... Foreign companies investing in India are advised to do a due diligence check, especially if entering into a jo... Dezan Shira & Associates helps Industries minister Jagadish Shettar (File photo) BENGALURU: The Karnataka government is all set to roll out a new industrial policy (2020-2025) with an ambitious plan to attract Rs 5 lakh crore investments over the next five years and maintain 10% yearon-year growth. Sections 64 and 65 of the Factories Act have been amended to extend overtime hours to 125 hours per quarter. The Karnataka Cabinet has cleared the New Industrial Policy 2020-25 which aims at holistic development of the state. Save my name, email, and website in this browser for the next time I comment. The policy also stipulates that MSMEs qualify for interest subsidy on technology upgradation loans of up to 10 percent for a period of five years. The investment promotion subsidy will be based on 10 percent on turnover each year for a period of five years and limited to 20 to 30 percent of value of fixed assets (VFA). Late last week, on July 23, the state cabinet of the Karnataka government approved the New Industrial Policy for 2020-25. The sectors encouraged include automobiles and auto components, pharmaceuticals, medical devices, knowledge-based industries, electric vehicles, and logistics, among others. Special focus on MSME: There is special focus on the micro, small and medium (MSME) sector to strengthen it in the state. The first such region or SIR will encompass the Dharwad, Gadag, Haveri, and Belagavi districts of Karnataka. It plans to make arrangements for adequate availability of power, water and transportation for industrial areas. Micro and small enterprises can avail reimbursement of power tariffs at the rate of INR 1 per unit for a period of three years. This website uses cookies to improve your experience while you navigate through the website. Karnataka’s new industrial policy incentivizes high-tech investments, boosts local jobs creation, and seeks to move industrial and technology hubs beyond the state capital, Bengaluru (formerly, Bangalore). Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. Annexure 2 Terms & Conditions for extending Incentives ... Annexure 4 List of Industrial Activities I Enterprises NO' Eligible for Incenlives and Concessions . Several areas are under considered for Special Investment Regions, like Dharwad, Gadag, Haveri and Belgaum Districts, Bagalkote, Bijapur, Bellary, Hassan, Koppal, Mysore, Mangalore and Raichur. In Zone-2, it is 55 percent VFA for 2.5 percent turnover for six years and 45 percent VFA for large enterprises in Zone-3 showing a 2.5 percent turnover rate. The Government of Karnataka has announced a new Industrial Policy 2020-2025. In this article, we briefly break down key focus areas of the policy, including the creation of special investment regions, incentives for high-tech and innovation-based enterprises, and implications for hiring, among others. Previous Article « India Discusses Preferential Trade Agreement with Southern African Customs Union, Next Article How India’s Economy is Recovering from COVID-19: A Snapshot View ». But opting out of some of these cookies may affect your browsing experience. The firm assists foreign investors throughout Asia from offices across the world, including in Delhi and Mumbai. and grow their operations. In January 2017, Karnataka Department of Commerce and Industries introduced an NRI policy to attract investments from non-resident Kannadigas. For enterprises run by persons belonging to a special category – women, members of the Dalit and Adivasi communities, ex-servicepersons, members from minority communities, and persons with disabilities – there are separate incentives. Stay Ahead of the curve in Emerging Asia. State Name of the Policy Year URL State Governments 1. Sorry, your blog cannot share posts by email. Karnataka Industrial Policy 2020-2025 August 11, 2020 by Raggi Mudde Karnataka Industrial Policy for 2014-2019 aims to revive the state’s financial growth and improve employment. The policy document has … The policy was issued by a notification dated 13 th August 2020. The New Industrial Policy for 2020-25 will oversee new incentives and an easing of the regulatory process.”, In terms of the kind of investments the state sought to attract, Shettar said: “To emerge as globally competitive with skill and scale that leverage hi-tech growth, following thrust areas have been recognized: Industry 4.0, Research and Development, Intellectual Property Rights (IPR), Technology Adoption and Innovation, Cluster Development Initiatives and Sustainable Industrialization.”. Local jobs creation: The policy will require new industrial projects to create as much direct employment as possible and hire locally – a minimum of 70 percent of the workforce should consist of locals and 100 percent in the case of Group D type of employees (housekeeping and sanitation staff, non-technical posts, drivers, etc.). Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. The policy and package of incentives and concessions will come into effect from 13 th August 2020 and will be valid for 5 years or until a new policy is announced. The Karnataka State Cabinet on 23 July 2020 approved the New Industrial Policy for 2020-2025 that aims to attract Rs five lakh crore worth investments over the next five years, and create about two million jobs to help mitigate the economic impact of the Covid-19 crisis. Additionally, MSMEs can access subsidies for sustainable operations strategies, such as setting up rainwater harvesting systems and wastewater management and get reimbursed for expenses on conducting a water audit and recycling their electronic and plastic waste. It also set up India’s first notified engineering and manufacturing SEZ in 2009. Annexwe 1 Definitions . The company is now establishing India's first 400-acre toy manufacturing ecosystem in Koppal, which is expected to be operational in 2020. The industrially backward districts come under Zone-1 and Zone-2 while more industrially developed districts are classified under Zone-3 and Zone-4. Annexure 5 Zonal Classification . It also set up India’s first notified engineering and manufacturing SEZ in 2009. The state ranked third among Indian states in terms of foreign direct investment (FDI) inflows, attracting FDI worth US$40.7 billion between 2000 and 2019. Policy . Karnataka is best known for its software industry and now biotechnology. (More in the section below.). Karnataka is a state in Southern India. Sections 64 and 65 have been amended to extend overtime hours to a total of 125 hours per quarter. The Factories Act, 1948 has been amended with respect to women working the night shift in factories. Notify me of follow-up comments by email. The state government plans on availing assistance from Japan International Cooperation Agency (JICA) for this purpose. While Karnataka saw its proposals shoot up 154% in the first 10 months of 2020 over the comparable period last year, the national numbers witnessed a 11.9% drop during the same period. Karnataka To Align Property Guidance Value With Market Rates, BBMP Free COVID 19 Testing In Bangalore – Zonal Helpline Numbers, Facilitate investments in advanced R&D, manufacturing and innovation, Maintain an annual industrial growth rate of 10%, Attract investments of at least 5 lakh crore, Zone 1 and 2: industrially backward districts, Zone 3 and 4: industrially developed districts like Bengaluru and Mysuru, Exemption from stamp duty and concessional registration charges, Interest subsidy on loans for technology upgradation taken from public service banks, Subsidies for sustainable operations strategies. This category only includes cookies that ensures basic functionalities and security features of the website. The main objectives of the new industrial policy in Karnataka are: The new industrial policy categorizes the state’s districts into zones. Micro, Small, and Medium-Sized Enterprises (MSMEs) will be given production turnover-based subsidies to encourage innovation. Establish new industrial corridors: The policy proposes the establishment of new industrial corridors within the state to boost industrial growth. It is mandatory to procure user consent prior to running these cookies on your website. Industrial areas and estates through PPP model: There are plans for establishment of industrial areas and estates through PPP (Private, Public and/or Partnership) model or in association with other government agency. The policy highlights aerospace, machine tool, steel & cement sectors as focus industries. Special investment regions in Dharwad and Shivamogga: The policy aims to enact the Special Investment Region (SIR) Act to create, operate, and regulate such investment regions in the state. For micro enterprises – investment promotion subsidies of up to 30 percent of VFA will be offered in Zone-1, 25 percent of VFA in Zone-2, and 15 percent VFA in Zone-3. India’s economy is showing signs of recovery after witnessing major COVID-19 led business disruptions. The policy focuses on treating all energy projects, including renewable energy projects, as industry and makes them eligible for all incentives, Filed Under: Industry Tagged With: government policies. REGISTER TODAY. State Name of the Policy Year URL State Governments 1. Good news for students with OCI cards or Overseas […], Stories are the best way for children to learn about […], Some of the villages in Karnataka are the most […], Here is a list of 2021 Bank holidays in Karnataka. Late last week, on July 23, the state cabinet of the Karnataka government approved the New Industrial Policy for 2020-25. In August, Karnataka announced New Industrial Policy (NIP) 2020-25. The state is home to the Pavagada Solar Park, which has an installed capacity of 2,000 MW, the largest in the country, of which 1,400 MW is operational. Exports from the state stood at around US$17.4 billion in 2018-19, which is 5.3 percent of India’s total exports. The incentives and concessions are primarily available to Manufacturing … The Bengaluru-Mumbai Economic Corridor and Chennai-Bengaluru Industrial Corridor pass through Karnataka. Industrial/Business/MSME Development Policies of State / UT Governments S. No. For those eligible for special category incentives, they will qualify for investment promotion subsidies worth 35 percent of VFA in Zone-1, 30 percent of VFA in Zone-2, 20 percent in Zone-3, and 10 percent in Zone-4. For enterprises operated by persons qualifying for special category incentives, a 100 percent concession of stamp duty is available in Zones-1, 2, and 3 and a 75 percent concession in Zone-4. The policy comes at a sensitive time for the south Indian state given the impact of COVID-19 and the need for a clear strategy to attract investment, create jobs, and incentivize industrial growth. Aequs is Karnataka's first third-party IT SEZ outside Bengaluru. A number of reforms have been introduced under the policy. The Industrial Employment Act, 1946 has been amended to allow contract employment or fixed term employment. The new industrial policy of Karnataka is expected to push mobile production in value terms in the state to Rs 30,000 crore and create 120,000 jobs by 2023, mobile handset and electronics body ICEA said on Sunday. It also aims to generate employment opportunities for 20 lakh people. The policy mentions funding (VC fund, angel funding), providing subsidies for allocating spaces to entrepreneurs to set up business, technological support and good infrastructure among the facilities to be extended for the growth of the sector in the state. Aequs is Karnataka's first third-party IT SEZ outside Bengaluru. micro, small, and medium-sized enterprises, India Discusses Preferential Trade Agreement with Southern African Customs Union, How India’s Economy is Recovering from COVID-19: A Snapshot View, Dezan Shira & Associates' Service Brochure, An Introduction to Doing Business in India 2020, Due Diligence for Foreign Companies in India, Karnataka’s New Industrial Policy for 2020-25: What Should India-Bound Foreign Investors Expect. And advice on choosing the right location for your business Zone-1, 65 percent of the state ’ total... Now biotechnology for Incenlives and concessions are primarily available to manufacturing … is! 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