Rajasthan govt to develop state as aerospace & defence manufacturing hub

Jaipur: The Rajasthan government has introduced a new Aerospace and Defence Policy, aiming to develop the state as a major hub for aerospace and defence manufacturing.

The policy announced on Wednesday, is expected to boost investment, generate employment, and accelerate industrial development across the state.

Under the leadership of Chief Minister Bhajan Lal Sharma, the state government is pursuing a multi-dimensional development strategy for a developed Rajasthan.

Along with agriculture, energy, education, health, infrastructure, and industry, aerospace and defence manufacturing has now been accorded priority.

The new policy seeks to strengthen Rajasthan's role in the country's aerospace and defence manufacturing and services ecosystem.

It focuses on attracting large-scale investments while promoting MSMEs, startups, and innovation-driven enterprises.

The state government believes this will significantly enhance economic activity and create new employment opportunities.

Under the policy, incentives will be provided for setting up manufacturing units, equipment and component suppliers, precision engineering units, and maintenance, repair, and overhaul (MRO) services related to the aerospace and defence sector.

Project classification is based on investment manufacturing projects under the policy have been classified into three categories: Large Projects fall under the range of Rs50 crore to Rs300 crore, mega projects fall under the range of Rs 300 crore to Rs 1,000 crore; and ultra mega projects are above Rs1,000 crore.

Similarly, service sector projects have been classified as large which come under Rs25 crore to Rs100 crore, mega ones come under Rs100 crore to Rs250 crore, ultra mega include above Rs250 crore projects.

Eligible aerospace and defence units established in Aerospace and Defence parks will receive 75% reimbursement of state taxes for seven years as an asset creation incentive.

Manufacturing units can opt for a capital grant of 20 to 28%, while service sector units may choose a capital grant of 14 to 20%, or a turnover-linked incentive of 1.2 to 2% for 10 years.

To promote job creation, the policy provides additional benefits such as employment booster, sunrise booster for initial mega and ultra-mega units, and anchor and thrust boosters.

Mega and ultra-mega units taking land from RIICO will benefit from flexible land payment options and lease rental subsidies for office space.

The policy also offers exemptions from banking, wheeling, and transmission charges, flexible land payment models, office space lease subsidies, and allows investment in captive power plants to be counted as eligible capital investment.

The state government believes the new Aerospace and Defence Policy will position Rajasthan as a key contributor to India's defence manufacturing capabilities while driving industrial growth and employment in the state.