Karnataka targets 25,000 startups with Rs 518 crore policy

The Karnataka Cabinet has approved the Startup Policy 2025–2030, setting a clear five-year roadmap for entrepreneurship across the state. This policy targets the creation of 25,000 new startups and comes with a substantial financial outlay of Rs 518.27 crore. The primary goal is to spread startup culture beyond the capital city, mandating that 10,000 of the 25,000 ventures must start outside Bengaluru. This decentralisation effort focuses on regional clusters like Mysuru, Mangaluru, Hubballi-Dharwad, and Kalaburagi. While Karnataka already acts as the centre for India’s startup economy, hosting over 18,000 registered startups, the new policy seeks to replicate this success statewide, building on the fact that 50 percent of all funded Indian startups started in Bengaluru.

Focus on futuristic technologies

The government places significant emphasis on DeepTech sectors, specifically targeting businesses working in Artificial Intelligence, Quantum Computing, Blockchain, Semiconductor Design, and ClimateTech. This focus aims to position Karnataka as a major technology hub in Asia. To achieve this, the policy introduces several specialised funding mechanisms. The Beyond Bengaluru Cluster Seed Fund provides essential early-stage capital to ventures in smaller cities, bridging the gap between urban and rural startup ecosystems. The key scheme, Elevate NxT, specifically supports DeepTech ventures, acknowledging their longer development cycles. Furthermore, the government proposes a Rs 500 crore Fund of Funds aimed at backing companies with longer gestation periods.

Financial support and infrastructure

The policy also outlines concrete financial assistance to promote venture growth. For infrastructure, private entities setting up new startup centers can receive a one-time capital grant, covering up to 50 percent of fixed costs, capped at Rs 50 lakh. To support talent acquisition, startups receive reimbursement for Provident Fund (PF) and Employee State Insurance (ESI) payments. Companies can reclaim up to Rs 3,000 per employee per month for two years, with a total limit of Rs 12 lakh per company. Beyond hiring support, the policy offers incentives for research projects and provides subsidies for cloud storage costs. Expanded Global Innovation Alliances (GIA) further offer startups access to markets in over 30 countries, supporting global scale-up. This strategic plan formalises the state’s commitment to nurture entrepreneurship at every stage, using targeted funding and infrastructure development to move startup activity across the entire state and ensure wider economic growth.