Karnataka IT Minister Requests Centre’s Fiscal Support For Electronics, Semicon Firms

Karnataka IT Minister Priyank Kharge has requested that the centre increase fiscal incentives to support the state's electronics and semiconductor sectors.

Kharge submitted a memorandum to Union IT Minister Ashwini Vaishnaw on June 28. 

The state is seeking funding support to use towards infrastructure upgradation, developing industry specific skilling programmes, bridging the gap between skill requirements and the disposable talent pool present in the state, and conducting research and development initiatives, among others.

“Given the national-level focus that has been provided to the sector, Karnataka is working on increasing its competitiveness and continues to be the frontrunner in developing a conducive ecosystem for electronics and semiconductor companies. While the state puts in its efforts, I wish to push forward a request to you for understanding the possibility for the government of India to also enhance its funding support towards Karnataka,” Kharge wrote. 

The memorandum highlighted Karnataka's significant efforts in the electronic and semiconductor sectors, positioning the state as a frontrunner in India's electronics growth story. The state boasts the highest proportion of innovative companies, accounting for 46% of the national share and contributing 10% of India's industrial output.

The state also exports $4.52 billion worth of electronics, ranking third in the country. Karnataka is home to more than 300 export-oriented manufacturing units. It is India's largest chip design hub, housing over 100 fabless chip design houses, and the country's leading producer of aerospace and defense equipment, the memorandum said.

“I urge you to consider my request and together strategize our proactive steps to enhance fiscal support from the Government of India," Kharge said. "This strategic intervention will not only foster growth and innovation within the sector but also contribute significantly to job creation and economic prosperity in the state and the country at large.”

The Government of Karnataka has been providing fiscal incentives, production-linked incentives, and infrastructure support to propel the electronics and semiconductor industries in the state, Kharge noted. 

Karnataka has implemented policies to bolster electronics manufacturing growth. Initiatives like the Special Incentives Scheme for ESDM Sector 2020–2025 provide benefits such as capital subsidies, fee reimbursement, and production-linked incentives. The state also targets ultra-mega investments and promotes specialised clusters such as aerospace, consumer electronics, and mobile phone manufacturing across different regions. Additionally, Karnataka aims to enhance its ecosystem with designated industrial areas and Centres of Excellence to support startups and foster innovation in various technology domains, the minister wrote in the memorandum.