Karnataka Food Processing Policy

KARNATAKA FOOD PROCESSING POLICY – SCHEME OVERVIEW

Particular	Details
Scheme / Policy	Karnataka Industrial Policy 2025–30 – Agro & Food Processing Sector
Implementing Department	Department of Industries & Commerce, Government of Karnataka
Eligibility	Eligible new industrial units and eligible expansion/diversification projects, subject to the Industrial Policy and applicable enterprise classification
Applicable Industries	Food processing, agro-processing, FMCG/food manufacturing and eligible allied food-processing activities
Capital Investment Subsidy	25% of Fixed Assets, without cap for eligible projects, as stated on Invest Karnataka's Agro & Food Processing sector page
Interest Subsidy	5% on term loan for 5 years
Stamp Duty	100% reimbursement
Power Tariff Subsidy	Up to ₹2/unit for 5 years
Wage Subsidy	Up to ₹3,000/employee/month for 5 years
ESI & EPF Subsidy	75% reimbursement for 5 years
Industrial Infrastructure	40% grant support for eligible fixed capital investment in factory buildings/common infrastructure
CETP/CSTP	50% subsidy on eligible fixed capital investment, up to ₹5 crore
Food Processing Infrastructure	Support may also be available through food-processing clusters, food parks and related infrastructure initiatives
Application	Karnataka Single Window System / applicable competent authority
Validity	Karnataka Industrial Policy 2025–30
Official Reference	Invest Karnataka – Agro & Food Processing

2. Eligibility

The incentives are intended for eligible enterprises establishing or expanding manufacturing projects in Karnataka.

Generally, the project should:

Be located in Karnataka.
Fall under an eligible agro/food-processing activity.
Have eligible fixed assets/investment.
Obtain applicable statutory approvals and registrations.
Meet the conditions prescribed under the Karnataka Industrial Policy 2025–30 and applicable operative guidelines.

Important: The exact incentive entitlement depends on the project location, enterprise category, investment, activity and applicable policy conditions. Karnataka's official incentive calculator is designed to determine the applicable incentives based on these factors.

3. Applicable Industries / Activities

The policy is applicable to eligible activities in the Agro & Food Processing sector, including projects involved in processing and value addition of agricultural and food products.

Examples may include:

Food processing units
Agro-processing units
Fruit & vegetable processing
Grain and cereal processing
Dairy and allied food processing
Meat and poultry processing, subject to applicable eligibility
Food manufacturing
Packaging/value addition activities connected with eligible food-processing operations
Other eligible agro and food-processing manufacturing activities

The exact activity should be checked against the applicable Karnataka policy classification before claiming incentives.

4. Subsidy / Incentive Details

According to Invest Karnataka's current Agro & Food Processing sector information, the following incentives are highlighted:

Incentive	Benefit
Capital Investment Subsidy	25% of eligible fixed assets, without cap
Interest Subsidy	5% on term loan for 5 years
Stamp Duty	100% reimbursement
Power Tariff Subsidy	Up to ₹2/unit for 5 years
Wage Subsidy	Up to ₹3,000/employee/month for 5 years
ESI & EPF Subsidy	75% reimbursement for 5 years

These are the sector-level incentives published by Invest Karnataka; the actual amount available to a particular project remains subject to the applicable policy, operative guidelines and project-specific eligibility.

5. Investment Limits

There is no single universal investment limit applicable to every Karnataka food-processing project.

The applicable incentive can depend on:

Value of Fixed Assets (VFA)
Enterprise category
Project location
Nature of food-processing activity
New project / expansion / diversification, where applicable
Employment generation
Applicable policy classification

Karnataka's official incentive system specifically asks for project type, enterprise type, district/taluk, investment and other project details to determine the applicable incentives.

6. Financial Benefits

The policy can provide financial support at different stages of the project.

A. Capital Investment Subsidy

Eligible fixed assets can receive a 25% capital investment subsidy as indicated for the Agro & Food Processing sector.

Eligible asset categories may include items such as:

Land
Building
Machinery
ETP
Dormitory and other eligible fixed assets

Invest Karnataka specifically describes the benefit as 25% without cap on fixed assets such as Land, Building, Dormitory, ETP and Machinery.

B. Interest Subsidy

Eligible projects can receive an interest subsidy of 5% on term loans for 5 years, subject to applicable conditions.

C. Power Tariff Subsidy

Eligible units may receive a power tariff subsidy of up to ₹2 per unit for 5 years.

D. Employment Benefits

The policy provides:

Wage subsidy: up to ₹3,000 per employee per month for 5 years.
ESI & EPF reimbursement: 75% for 5 years.

These benefits are particularly relevant for labour-intensive food-processing projects.

7. Conditions

The project must comply with the applicable Karnataka Industrial Policy and its operative guidelines.

Important conditions may include:

Project must be an eligible industrial activity.
Investment must be made in eligible fixed assets.
Applicable government approvals must be obtained.
The enterprise must comply with employment-related requirements for wage/ESI/EPF benefits.
Incentive claims must be submitted within the prescribed timelines.
The project must satisfy the conditions applicable to its location and enterprise category.
Incentives cannot be assumed automatically merely because the project is a food-processing unit.

Project-specific eligibility should be confirmed through the Karnataka Single Window / Incentive Calculator before finalizing the investment structure.

8. Quick Client Summary

Particular	Karnataka Agro & Food Processing
Policy	Karnataka Industrial Policy 2025–30
Sector	Agro & Food Processing
Capital Investment Subsidy	25% of eligible fixed assets
Interest Subsidy	5% for 5 years
Stamp Duty	100% reimbursement
Power Subsidy	Up to ₹2/unit for 5 years
Wage Subsidy	Up to ₹3,000/employee/month for 5 years
ESI/EPF	75% reimbursement for 5 years
Application Platform	Karnataka Single Window System
Final Incentive	Subject to project-specific eligibility and policy conditions

Ready to Get Started?

Contact us today for a free consultation! Our expert team is here to help with all your financial, compliance, and subsidy needs. Reach out now to see how we can assist you in achieving your goals and simplifying your processes.