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karnataka r&d rebate 50 crore

🔍 What the ₹ 50 Crore R&D Rebate Means

Part of the New IT‑BT Policy (2025–2030)

Karnataka’s recently announced IT policy (2025-30) includes a major R&D incentive: companies can claim up to ₹ 50 crore in reimbursements for eligible R&D spending.

This is one of the largest state-level R&D incentives in India.

The reimbursement is 40% of eligible R&D expenses under the scheme.

Objective: Shift to High-Value Innovation

The goal is to encourage firms to move from service-led models to product-centric R&D, especially in deep-tech areas like AI, blockchain, quantum computing, and advanced engineering.

It ties into Karnataka’s “Beyond Bengaluru” strategy — the state wants to develop tech capabilities outside just the capital.

Cap & Scale

The ₹ 50 crore is a cap per company (or per eligible entity) for R&D reimbursement.

According to the policy, there may be a limit on the number of beneficiaries. Some reports suggest a first-come, first-served basis for this incentive.

Total policy outlay: the IT‑BT policy has an overall outlay of ~₹ 445.5 crore over five years.

Other Related Incentives

There’s also a 10% extra incentive for companies that turn their R&D operations into local manufacturing units.

The policy underscores innovation: aside from R&D, incentives are being given for AI hubs, next-gen connectivity, and other deep‑tech areas.

⚠️ Implications & Criticism

Positive for Startups & Deep-Tech Firms: This could attract more high-value R&D operations (especially from global-capability centres or deep-tech startups) into Karnataka.

Decentralisation: Encouraging firms to locate outside Bengaluru (in tier-2 / tier-3 cities) could help reduce the concentration of tech activity in Bengaluru and foster more balanced growth.

Risk of Misuse / Capacity Constraints: As one banker pointed out, with high caps and a limited number of slots (100 applicants per incentive category in some reports), there could be a race to claim benefits.

Budget Pressure: The state will need to ensure that the ₹ 445 cr (or more) budgeted for these incentives is well-managed so that they do not strain public finances.