STARTING UP made easy in Karnataka


Startups are now getting the hype everywhere. They are the only centre of attraction of every speech and policies made. The Centre and the State Government are making their policies for startups to encourage, boost and undoubtedly to support them.



The charm of startups is high in Karnataka. The Government of Karnataka has made grand plans for startups to be domiciled in this State. The new and modified startup policies of state would help in attracting investors and create employment. STARTING UP made easy in Karnataka.


Major progress highlights of Karnataka may be summed as:

  • In 2015, around 35% of Indian startups functioned from the state, making it the single largest startup hub in the country.
  • Small businesses have been the largest job providers.
  • When compared among the top 20 ecosystems, Karnataka witnessed the second highest growth rate for exit volume and VC Investment.
  • It has moved to # 15, four positions ahead to 2012 ranking.
  • Bengaluru is the only Indian city to be ranked within the best twenty startup eco systems across the world.


When it comes to define the startups, government has provided a broad bandwidth to cover startups:

  • The startup should not be older than four years.
  • It should be registered in Karnataka.
  • 50 percent of its workforce should be employed in Karnataka.
  • Benefits will cease after the company reaches revenue of Rs 50 crore.
  • Should be technology based.


The focal point of the policy is:

  • To create six lakh direct jobs in the State.
  • To reimburse the marketing costs up to 30 percent under a yearly basis; provided the startup is registered to a recognised incubator under the new policy.


The vision is to CREATE A WORLD- CLASS STARTUP ECOSYSTEM through strategic investment and policy interventions leveraging the robust innovation climate in Bangalore.

  • Stimulate growth of 20,000 technology startups.
  • Mobilise Rs 2,000 crore fund of funds.
  • Facilitate generation of at least 25 innovative technology solutions with social impact.


The strategies shall include:

New Age Incubation Network (NAIN):

NAIN institutions shall act as hubs with other academic institutes in the district acting as spokes driving the innovation ecosystem in the geography.

They shall be mandated to incubate projects through competitive selection process among students, alumni as well as local entrepreneurs.


  • Students of such institutions will also be encouraged to intern with startup incubators
  • Annual Financial support for projects for upto Rs. 3 lakhs per project
  • Opportunity to visit international startup destinations
  • Internship Stipends


Research and Development:

  • The State Government would assist in the setting up of Technology business incubators (TBIs) in institution of higher learning with well-developed Research and development facilities.
  • The host institution must provide land and built-up space for TBI and must also share available facilities and expertise for setting up of the TBI.
  • The TBI must be run as a society or a section 8 company with strong academic-industry collaboration.


Seed funding:

  • The State will set up an Ignition fund to provide a grant-in-aid for startups in the idea stage.
  • Grant will be provided through TBIs.


Channelizing Innovation for Social Impact:

  • To select five ideas each year, which can aide social challenges
  • The winners will also automatically qualify for incubation space in the incubators supported by the State Government.


Incentives and concessions:

  • Startups in recognised incubators will be permitted to file self-certifications for seven laws of the State Government:
    1. The Factories Act 1948
    2. The Maternity Benefit Act 1961
    3. The Karnataka Shops &Commercial Establishments Act 1961
    4. The Contract Labour (Regulations & Abolition) Act 1970
    5. The Payment of Wages Act, 1936
    6. The Minimum Wages Act 1948
    7. The Employment Exchanges (Compulsory Notification of Vacancies) Act 1959


  • This policy is applicable to all startups satisfying the eligibility criteria set forth in the policy in the sectors of Manufacturing, ICT, BT and other sectors.


Although the venture capital world is still waiting for an announcement about the size of the fund-of-funds, Karnataka wants startups that can solve problems in the healthcare and the food processing industry. The State also wants environmentally friendly technologies like robotics and 3D-Printing to disrupt businesses in the State.


The government will invite several businessmen to set up new incubators, which it will select through tenders. Such more policies are expected from different states highlighting the issues and a proper solution so much to provide the ease of business.

Get started in Karnataka now.




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