India’s Aerospace and Defense Capital: Karnataka Continues to Lead the Way

Published: 03 Jun 2025

Author: Precedence Research

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June 1, 2025

Karnataka's Ministry of Large and Medium Industries and Infrastructure Development, M B Patil, emphasized the state's bold decision to remain a leading state in India to establish the aerospace and defense sectors. While answering the question about what will be the goal of the defense and aerospace sector in the upcoming future, he added, "Karnataka has undoubtedly remained as a capital for the defense and aerospace sector due to 67% contribution of all aircraft and helicopter manufacturing within the country and 65% of the country’s exports." The Karnataka government aims to achieve Rs 45,000 crore by 2027 for aerospace and defense investment, helping generate nearly 60,000 jobs. Such a firm stance and vision will lead to India's highly developed aerospace and defense sector and Karnataka as a frontier state. 

With the help of innovative manufacturing and space technology achievements, many private enterprises and start-ups are driving aerospace and defense in Karnataka. For example, the first privately led final assembly line for the H125 Helicopter was collaboratively established by Tata Advanced Systems Limited and Airbus in Kolar, Karnataka. Moreover, amid Operation Sindoor by the Indian government, the Karnataka government emphasized manufacturing drones and avionics by offering the most competitive incentives for manufacturers.

Investors engaged in the manufacturing of drones and avionics units can avail of a 25% subsidy to buy land, a 20% capital subsidy for plant and machinery, and a production-linked incentive of 1% of the yearly turnover for up to the next five years from the day of plant establishment. To further accelerate the growth of these niche markets, facilities like tariff reimbursements, stamp duty and exemptions in registration fees, and exclusion of electricity bills generated by plant activity. By offering such a supportive environment to produce drones and avionics, Karnataka is set to become India's leader and prime destination for drone and avionics manufacturing.