The state government of Karnataka has introduced significant incentives under its new IT-Policy 2025-2030 aimed at decentralising technology investment from Bengaluru and fostering development in emerging districts. According to a report by Moneycontrol, firms setting up in Tier-II and Tier-III cities may receive up to ₹50,000 for each local employee hired, while developers establishing IT or ITeS parks are eligible for capital expenditure reimbursement of up to ₹10 crore.
The policy is part of a wider strategy to relieve pressure on Bengaluru’s infrastructure and stimulate technology clusters in locations such as Mysuru, Mangaluru, Hubballi-Dharwad, Kalaburagi, and Shivamogga. Companies relocating operations from Bengaluru to these areas may receive subsidies on rent, property tax, electricity duty and telecom expenses, making non-metropolitan regions more attractive for tech investment.
Under the policy, for park developers outside Bengaluru, 25% of eligible capital cost is reimbursed (capped at ₹10 crore), while parks located within Bengaluru receive 20% reimbursement capped at ₹7.5 crore. The assistance is restricted to 10 selected parks to ensure targeted implementation.
A separate incentive targets talent pooling. The state proposes to reimburse employee recruitment costs and offer relocation benefits for mid-career professionals returning from overseas or shifting from Bengaluru to other districts. The policy allocates a significant portion of the ₹445.5 crore outlay towards innovation and R&D incentives, raising the cap for qualified R&D expenditure reimbursement to ₹50 crore per firm — a dramatic increase from the earlier ₹1 crore cap.
For the real estate and infrastructure sectors, this development signals new opportunities in emerging tech corridors across Karnataka. With incentives being extended beyond the traditional Bengaluru cluster, the policy is likely to drive growth in office parks, mixed-use campuses and residential communities surrounding these next-generation hubs.
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