Karnataka Unveils ₹518 Cr Start-Up Policy to Build 25,000 Ventures by 2030, Push Beyond Bengaluru

The Karnataka cabinet on Thursday approved the Karnataka Start-up Policy 2025–2030, allocating ₹518.27 crore to back the creation of 25,000 new startups over five years. The policy aims at an explicit target of 10,000 ventures outside Bengaluru in cities such as Mysuru, Mangaluru, Hubballi-Dharwad and Kalaburagi.

The policy is framed as a push to make Karnataka a global innovation hub while deliberately widening opportunity beyond the state capital.

Minister for Electronics, IT & Biotechnology Priyank Kharge said the plan prioritises deeptech areas, AI, blockchain, quantum computing, semiconductor design and similar domains, and blends funding, incubation, skilling and market access to help startups scale.

Policy Details

The ₹518.27 crore outlay funds a mix of interventions. It includes direct grants and seed funding, incubation and infrastructure support, mentoring and skill development, measures for market access and international collaboration, and regulatory facilitation.

A flagship programme called Elevate NxT will back DeepTech startups across the state. The policy also proposes an Alternate Investment Bridge to expand startup financing and attract industry linkages and private capital.

To spread activity geographically, the state will seed Growth Labs, one per cluster across six selected cities, and support private incubation centres with a one-time capital grant equal to 50% of fixed-cost investment or ₹50 lakh (whichever is lower), excluding land and buildings.

Other incentives include PF/ESI reimbursement of up to ₹3,000 per employee per month for the first two years (capped at ₹12 lakh per company), cloud-storage subsidies and R&D incentives.

Deeptech Push

The move follows a recent state announcement of a ₹600 crore plan to back deeptech startups and an earlier ₹1,000 crore Quantum Mission aiming to create 10,000 skilled jobs and position Karnataka as a “Quantum Capital of Asia.”

The policy arrives amid inter-state competition. Tamil Nadu has announced a ₹100 crore Co-Creation Fund and Delhi floated a draft policy with a proposed ₹200 crore VC fund.

Karnataka already leads India in startup activity, Bengaluru raised about $544 million in Q3 2025 across 76 deals, but policymakers want growth to lift Tier-2 and Tier-3 ecosystems. By marrying capital support with incubation, skills and city-level Growth Labs, the state is attempting to convert latent demand in rising urban centres into investible ventures.

Implementation & Risks

Key execution items include rolling out Growth Labs, operationalising the Alternate Investment Bridge to attract private capital, and timely disbursal of grants and hiring incentives.

Observers will watch whether the incentives draw high-quality deeptech founders, how quickly private incubators respond to the capital grants, and whether the policy boosts startup formation and job creation outside Bengaluru as promised.

Timelines for the first tranche of fund deployment, the announcement of the six Growth-Lab locations, details of the Alternate Investment Bridge structure, and early metrics (startups incubated, jobs created, and private co-investment mobilised) will determine whether the policy moves Karnataka from plan to measurable impact.