Karnataka Manufacturing Industry 2026: Policy & Key Sectors

Why Is Manufacturing in Karnataka Important in 2026?

Manufacturing in Karnataka 2026 rests on a strong macroeconomic base. The Economic Survey projects real GSDP growth of 8.1 percent in 2025-26, above the national rate of 7.4 percent, with manufacturing estimated to grow 7.2 percent.

DPIIT data show cumulative FDI inflow of Rs 5,58,383 crore (USD 70.58 billion) between October 2019 and March 2026. That is the second highest in India, after Maharashtra, and 21 percent of the national total.

Chief Minister D K Shivakumar, who unveiled the Karnataka Industrial Policy 2025–30 as Deputy Chief Minister, said it emphasizes equitable and sustainable development. That emphasis is visible in electronics, aerospace, automotive and semiconductor-equipment projects now moving into Devanahalli, Kolar, Tumakuru and Belagavi.

Major Manufacturing Industries in Karnataka

Semiconductor & Electronics Manufacturing: Electronics attracts the largest commitments by value. At the March 2026 investor conclave, electronics and data centres drew Rs 24,103 crore from 13 companies, the biggest sector share.

The operating anchor is Foxconn's iPhone campus in Devanahalli. It began initial production in April 2025, with construction expected to finish by December 2027. The 2025–26 state budget cited capital investment of Rs 21,911 crore.

Tata Electronics runs the former Wistron iPhone plant at Narsapura in Kolar. Kaynes Technology, headquartered in Mysuru, is expanding in Chamarajanagar.

 Industries Minister M B Patil has said Kaynes will invest Rs 1,500 crore in a printed circuit board unit there, and has urged it to consider Vijayapura and KGF as well.

Semiconductor manufacturing in Karnataka sits at the equipment and materials end of the chain. Lam Research has been allotted 73 acres in Doddaballapura for what the state calls India's first silicon-component facility, and Applied Materials plans Rs 3,600 crore over ten years in Bengaluru.

After SEMICON India 2026, Minister for Large and Medium Industries and Infrastructure Development M B Patil said the two projects would transform the state's semiconductor supply chain, equipment manufacturing, precision engineering and R&D.

The strategy appears to be converting chip-design depth into supplier capacity.

Aerospace & Defence Manufacturing: A Hi-tech Aerospace and Defence Park at Devanahalli and a private aerospace SEZ at Belagavi anchor the sector. HAL's greenfield helicopter factory in Tumakuru opened a Prachand LCH structure assembly line in April 2026.

On 9 September 2026 the Cabinet approved the Aerospace Policy 2026-31, targeting Rs 60,000 crore and 60,000 jobs, with a 30 percent capital subsidy in Zone 1 and up to 35 percent in non-focus areas.

Deputy Chief Minister G Parameshwara cited a Tata plan to build light combat aircraft with HAL as a project that could receive state incentives.

The supplier tier matters as much. Aequs Chairman and CEO Aravind Melligeri has said the Belagavi SEZ lets it complete end-to-end manufacturing and ship parts within about 24 hours. Airbus and Boeing appear here as customers of Karnataka-made components.

Automotive & EV Manufacturing: Toyota Kirloskar Motor at Bidadi is the largest verified vehicle manufacturer. Its Rs 3,300 crore third-plant MoU planned 100,000 units a year, with the first model expected in 2026.

On 3 September 2026 a state clearance committee approved a further Rs 1,200 crore. Honda's two-wheeler operations are also at Narasapura in Kolar.

Seven automotive and EV companies signed MoUs worth Rs 4,998 crore in March 2026, including Astemo (Rs 1,222 crore) and Ultraviolette (Rs 1,000 crore).

Engineering & Capital Goods Manufacturing: Tumakuru is the center of this segment. The Tumakuru Machine Tool Park is a Centre-state vehicle for machine-tool makers and component suppliers.

The 160-acre Japan Industrial Township is fully allotted to 107 companies and a 300-acre extension is planned. The adjoining CBIC Township offers 574 acres in Phase A, with infrastructure expected by late 2026.

Localized precision engineering here keeps value addition inside the state's supply chain.

Pharma, Biotech & Other Manufacturing: Four pharma and biotech firms committed Rs 2,065 crore at the March 2026 conclave. Beyond that, Baldota Steel and Power's Rs 54,000 crore plan shows core-industry capital moving to North Karnataka, at Koppal.

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