Karnataka Unveils 16 Incentives to Push IT Outside Bengaluru

Karnataka has rolled out a wide set of incentives to pull IT and ITes growth beyond Bengaluru its the state’s new Information Technology (IT) Policy 2025–2030. The policy focuses on greener infrastructure, stronger talent pipelines, and lower operating costs for companies that expand outside the city.

The government will fund 40% of eligible R&D spending up to ₹5 crore for units across the state. Developers building new IT parks outside Bengaluru will get 20% of capital expenditure support, capped at ₹5 crore, after clearance from state committees.

The policy pushes talent creation. Companies will get half of the internship stipend for three months, up to ₹5,000 a month, with a limit of 100 interns. Recruitment assistance rises with hiring volume. Firms hiring 701 to 999 employees can claim 50% of recruitment costs up to ₹7 crore. 

Units hiring more than a thousand workers will get a custom package. Companies shifting employees to regions outside Bengaluru will get half of relocation costs up to ₹50,000 per worker. 

New employees hired in these regions will also draw ₹3,000 a month for two years if they stay for that period. 

Skilling gets a push with 20% reimbursement of training costs, with higher support when candidates get hired. Faculty training programmes can get half of their training bills covered up to ₹10 lakh a cohort.

Operational support is a major part of the plan. Firms can claim rental assistance for the first year of commercial operations, with a cap of ₹50 lakh for larger teams. The government will reimburse half of the cost of quality certifications up to three times. 

Patent filing support covers half of the statutory fees. Domestic patents can fetch up to ₹3 lakh for units outside Bengaluru. International patents can fetch up to ₹10 lakh in that region. Companies can shift from commercial to industrial power tariffs. 

New units operating beyond Bengaluru will get full electricity duty reimbursement for five years and 30% property tax reimbursement for three years.

Companies moving outside the city will also get support for internet and telecom bills. The government will reimburse 25% of annual internet costs up to ₹6 lakh for three years.

The push is aimed at spreading IT growth across the state with clear financial incentives for expansion, talent development, and green infrastructure.

The Karnataka cabinet has approved two major policies — the Information Technology (IT) Policy 2025–2030 and the Space Technology Policy 2025–2030 on November 13 and announced the same at Bengaluru Tech Summit 2025 on November 18.

These policies aim to strengthen the state’s position as a leading technology hub in India. The Cabinet has set aside ₹967.12 crore to implement these initiatives over the next five years.

Under the new IT Policy, the government wants to increase software exports from ₹ 4.09 lakh crore to ₹ 11.5 lakh crore by 2030. It also wants to raise the IT sector’s share in Karnataka’s economy from 26% to 36%. The policy aims to create over 90 lakh direct and indirect jobs during this period.