Karnataka has launched an aggressive push to expand the state’s technology ecosystem beyond Bengaluru under its new IT & BT Policy 2025–2030. The policy introduces 16 incentives aimed at encouraging companies to establish operations in tier-2 and tier-3 cities, with a strong focus on decentralisation and future-ready infrastructure. Backed by a state allocation of ₹967.12 crore, the government aims to boost software exports from ₹4.09 lakh crore to ₹11.5 lakh crore and generate over 90 lakh jobs in the next five years.
A major highlight of the policy is its emphasis on research, innovation and intellectual property development. The government will reimburse 40% of eligible R&D expenditure up to ₹5 crore and offer financial support for both domestic and international patent filings. These measures are expected to attract deep-tech startups, GCCs and product engineering companies looking for stronger innovation pathways outside the capital.
The policy also aims to significantly reduce operational costs for firms expanding into smaller cities. Companies setting up new IT parks can claim 20% capital expenditure reimbursement, while new units will receive full electricity duty exemption for five years, rental assistance for the first year and reimbursements on internet and telecom expenses. To support workforce mobility, the policy includes subsidies for skilling programmes, internship support, faculty development funding and relocation reimbursements for employees moving out of Bengaluru.
Collectively, these measures reflect Karnataka’s strategy to build a balanced, distributed and innovation-driven technology landscape. By lowering entry barriers and strengthening regional talent pools, the government is positioning emerging hubs as the next engines of digital growth.
If the rollout maintains momentum, Karnataka could redefine how tech growth is distributed across the state and reinforce its leadership as India’s most future-ready digital economy.
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