Karnataka's IT Policy Shocker: Rs 50 Cr R&D Incentive Ignites India's Deep Tech Future! Find Out How!

Author

Simar Singh | Whalesbook News Team

Detailed Coverage:

Karnataka has launched a forward-thinking draft IT Policy for 2025-30, setting its sights on solidifying its position as India's leading deep-tech innovation hub. A cornerstone of this policy is an unprecedented research-linked incentive, offering companies reimbursement of up to Rs 50 crore on advanced innovation and R&D spending. This represents a significant 40% of eligible expenditure, marking the highest state-level support for technology research in India and a substantial increase from the prior Rs 1 crore cap. The overall policy outlay stands at Rs 445 crore over five years, with Rs 125 crore specifically earmarked for R&D incentives.

The policy aims to accelerate India's transition from a services-oriented economy to one driven by high-value technology innovation, enhancing global competitiveness in areas like artificial intelligence, cybersecurity, extended reality, and blockchain. It also encourages a shift from service-led models to product-centric innovation and supports deep tech startups by allowing them to pilot solutions with government departments, with successful pilots leading to state endorsement and wider adoption. This initiative strengthens Karnataka's appeal for global capability centres (GCCs) and engineering R&D investments, aligning with the state's goal to boost IT's contribution to Gross State Value Added from 26% to 36%. The policy awaits state cabinet approval.

Impact This policy is set to significantly boost the Indian technology sector, fostering innovation and competitiveness. It encourages R&D investments, potentially leading to higher growth for tech companies and attracting substantial foreign and domestic capital. The focus on deep tech aligns with global trends, positioning India for leadership in advanced technologies. Rating: 8/10

Difficult Terms Deep Tech: Refers to startups and technologies based on significant scientific discovery or engineering innovation, often requiring substantial upfront R&D and capital. Examples include AI, advanced materials, and biotechnology. R&D (Research & Development): Activities undertaken by companies to invent new products and services, or to improve existing ones. Global Capability Centres (GCCs): Offshored centers established by multinational corporations to perform business functions like IT services, R&D, and operations. Gross State Value Added (GSVA): A measure of the value of goods and services produced in a particular state, similar to state-level GDP. Extended Reality (XR): An umbrella term encompassing virtual reality (VR), augmented reality (AR), and mixed reality (MR) experiences.