Electronics System Design and Manufacturing

KDEM is an initiative by the industry and for the industry. It aims to support the govt to reach the target of USD 150 bn in the State’s IT exports
Mangaluru cluster to aim at creating a thriving ecosystem that fosters innovation across its sectors for prosperity of the region.
40 Unicorns and 50 Soonicorns target 150 VC investors with a corpus of USD 100 bn

Karnataka's ESDM Initiative

About ESDM

The Karnataka Digital Economy Mission has been unwavering in its commitment to harness the limitless potential of the state’s digital economy. With Electronics System Design and Manufacturing (ESDM) as one of the core verticals, KDEM to build a robust ESDM infrastructure in the state with a clear roadmap chalked for the year 2025 and ensuring Karnataka leads the way in advancing the country’s semiconductor game.
Why Karnataka? Karnataka is a leader in the Semiconductor and ESDM sector.
✅ 10% Contribution to National Electronics output
✅ Above 100 Fabless chip design houses and is the largest Chip Design Hub in India
✅ 40% contribution to the National share in electronic design
✅ 50% contribution to the National share in electronic product companies

Existing ESDM Clusters in Karnataka

  • Lahari – A World Class Testing and Certifying Facility – Set up in the historic city of Mysuru, to provide Testing, Quality & Regulatory needs of the regional electronic industry. Lahari has the arsenal of “Advanced Technologies and methodologies” to help grow the local electronic industry, encourage new investments and new product designs. In short, Lahari is a “ONE STOP SHOP for PRODUCT DEVELOPMENT & COMPLIANCE WORK” – dedicated to ESDM.

  • GoI & GoK has approved the proposal for setting of Multi-tenancy Clean Room in Mysuru. The cleanroom facility would be a crucial element in attracting compound semiconductor / OSAT / ATMP companies into the state as it would ease the investing companies’ burden of initial capital investment. It can also be stated that this model of business would also be one of the key elements for attracting the semiconductor investments into the state of Karnataka.

  • Under EMC 2.0 Scheme of MeitY, 7 LoI’s worth 1300+Cr has been signed. With over 230 acres of land approved, over 1200 jobs will be facilitated in Mysuru.
    • Under EMC 2.0 Scheme of MeitY, 11 LoI’s worth 300+Cr has been signed. With over 200 acres of land approved, over 2000 jobs will be facilitated in Hubballi.

    • Toy Manufacturing Cluster – Envisaged under the Product Specific Industrial Cluster Development Programme of the government of Karnataka, this is the first cluster in India dedicated for manufacturing toys. The cluster is also estimated to attract an investment of over Rs 4,000 crore and create over 25,000 direct jobs (mostly for women in North Karnataka) and over a lakh indirect job.

Policies and Schemes

Electronic Systems – India is one of the largest consumer electronics markets in Asia Pacific Region. The world’s fastest-growing industry, Electronics System Design and Manufacturing (ESDM) continues to transform lives, businesses, and economies across the globe. The Government of India attributes high priority to electronics hardware manufacturing, as it is one of the crucial pillars of Make in India, Digital India, and Start-up India programmes.

India is expected to have a digital economy of $ 1 Tn by 2025. India’s semiconductor market is expected to increase from ~$ 15 Bn in FY20 to ~$ 110 Bn in FY30, growing at a CAGR of 22%.

The Semicon India Program with an incentive outlay of ~$ 10 Bn was launched with the vision to develop a sustainable semiconductor and display ecosystem in the country. This program will establish India as global hub for semiconductor and display manufacturing, promote self-reliance, strengthen resilience in global supply chains, and pave the way for India’s technological leadership in the industry. Further details can be found here

Government of India Policies and Schemes

Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing
Production Linked Incentive Scheme (PLI) for IT Hardware
Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)
Modified Electronics Manufacturing Clusters Scheme (EMC 2.0)
Scheme for setting up of Semiconductor Fabs in India
Scheme for setting up of Display Fabs in India
Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP) / OSAT facilities in India
Design Linked Incentive (DLI) Scheme

Government of Karnataka Policies and Schemes

Handbook On Digital Economy Policies, Programs & Incentives In Karnataka
K-ESDM Policy 2017 – 2022 – Government of Karnataka

Develop Karnataka into a global ESDM hub and a hotbed of innovation through focused
interventions and encouragement to local companies in the sector.

  • Stimulate the growth of 2000 ESDM start-ups during the policy period.
  • Enhance value addition done in Karnataka by 50%.
  • Create 20 Lacs new jobs in the ESDM industry by 2025, both direct and indirect, thereby increasing the total workforce in the sector to ten times the present
  •  Effect a quantum jump in the overall revenues of Karnataka’s ESDM companies to USD 40 billion by 2025.
Special Incentives Scheme for ESDM Sector (2020-25)
  • Capital Investment Subsidy: 20% of eligible capital expenditure on Plant & Machinery
  • Land Subsidy: 25% of expenditure on land up to an extent of 50 acres (only in districts other than Bengaluru Urban & Rural)
  • Stamp Duty Reimbursement: 100%
  • Registration fee reimbursement: 100%
  • Reimbursement of Land conversion fee: 100%
  • Incentive on Power & Electricity Duty:
    • INR 1 per unit for 5 years from the month of commencement of commercial production
    • 100% exemption for 5 years from the month of commencement of commercial production
  • Production Linked Incentive (PLI) Scheme: 1% of annual turnover for a period of 5 years

ESDM Infrastructure

Lahari- Advanced Testing Facility

Multi Tenancy Clean Room

The Global Emerging Technology Design Center

Skilling Infrastructure & Labour Environment: Institute of Excellences: Indian Institute of Management, Indian Institute of Science, National Institute of Design, International Institute of Information Technology etc.
Youths of Age Group 16- 25 yrs
0 Mn
Engineering Colleges


Enhance Skill Development in Karnataka

Talent Accelerator vertical at KDEM to develop and nurture the talent pool by refining & strengthening the existing initiatives. With focused interventions and collaboration with Department of Higher Education, Skill Development Corporation Authority, VTU, new strategy to be built for skilling and boosting employment opportunities in the state.

Aim towards building Quality Infrastructure

With effective implementation of infra policy, industry collaboration, KDEM to facilitate centre of excellences (CoEs) to provide an impetus to local industry; and encourage new investments and growth in Beyond Bengaluru clusters.

Cluster Ecosystem Support

Under the Beyond Bengaluru mission, KDEM to structure and operationalize PMA policy to encourage domestic procurements; accelerate next generation technologies through pilot projects and encouragement to grass-roots entrepreneurship and IP creation.

Encouragement to Start-ups and MSMEs

Start-up and Innovation vertical at KDEM Strengthen the existing Semiconductor venture fund for accelerated investments; and promote expansion and growth of KESDM industry through market development activities and support to local companies.

Enhancing Ease-of-doing Business

KDEM acting as a bridge between industry and government, to Simplify and streamline policies and procedures to enhance overall experience of doing business in the state; and put in place mechanisms for faster facilitation of incentives and other policy benefits to attract investments from global companies in the sector.


16 MAR 2023

Pre-BTS Shows

16 APR 2023

KDEM knowledge dissemination series

16 SEP 2023

Policy talks

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KEONICS, 27th Main Rd, 1st Sector, HSR Layout, Bengaluru, Karnataka 560102