The Karnataka (a state in South West India) government is in favour of defence manufacturing companies by setting up a defence manufacturing zone and putting the final touches to an aerospace policy in the state.
The State has planned to set up a defence manufacturing zone in Chitradurga which is around 200km north of Bangalore.
Science and research organization which includes second campus of Indian Institute of Science (IISc) which is based in Bangalore and focused on research, Indian Space Research Organization (ISRO), Defence Research and Development Organization (DRDO) and Bhabha Atomic Research Centre (BARC) have set up facilities in Chitradurga district, which has become an attractive destination for defence manufacturing.
A defence manufacturing estate in Chitradurga district would be established along with an aerospace park in Bangalore. A draft aerospace policy is before the state cabinet for consideration and the state aims to attract $4 billion before April 2017 and generate employment for 40,000 people and expects to finalize the policy in a few weeks, before the state budget is announced, by March 2013, according to Murugesh M. Nirani, State industries minister.
Serviced lands (a land provided with infrastructure and other facilities such as power, water supply, roads, sewerage) in the industrial estate of Chitradurga would be available to potential investors who are willing to set up their facilities. Hence, this will be an ideal position for the estate since the proximity of ISRO, DRDO, IISc and BARC will result in demand for supporting ancillaries, according to the defence manufacturing proposal.
The state has identified 50-100 acres for the project and private partners will be in charge of developing industrial sheds, roads, drainage, power, and data facilities. The government has also appointed Crisil Infrastructure Advisory to prepare a pre-feasibility report for the project, according to a government official.
Karnataka has positioned itself as an aerospace destination, with several scientific and technical educational institution firms. Many aerospace companies have established offices in Bangalore which include HAL (Hindustan Aeronautics Ltd), established in 1940, according to PricewaterhouseCoopers, in a 2011 report.
In 2009, Boeing Co. launched a research and technology unit in Bangalore to team up with Indian research and development organizations. Airbus manufacturer European Aeronautic Defence and Space Co also began research operations in the city in 2009, with the establishment of an innovation unit. Whereas, in 2010, Rolls-Royce Holding Plc. and HAL signed a pact to manufacture aircraft engine parts.
Bangalore Aerospace Park and the Bangalore Aerospace SEZ (special economic zone) in a private-public partnership are among the significant policy measures being undertaken to be established. Both the park and the SEZ will be established near Bangalore’s international airport. The state will also offer incentives of Rs.5-crore anchor unit subsidy, exemptions from electricity duty, interest-free loans, and entry tax exemptions for plant machinery and capital goods, according to the policy document.