The Rajasthan government has launched a new Aerospace and Defence Policy with the goal of establishing the state as a significant center for aerospace and defence manufacturing. This policy, unveiled recently, aims to attract investments, create jobs, and spur industrial progress throughout Rajasthan. Chief Minister Bhajan Lal Sharma is leading the state government’s efforts to implement a comprehensive development strategy for a more advanced Rajasthan.
The policy places a strong emphasis on aerospace and defence manufacturing, alongside sectors like agriculture, energy, education, health, infrastructure, and industry. It is designed to enhance Rajasthan’s role in the national aerospace and defence manufacturing and services landscape. By encouraging large-scale investments and supporting MSMEs, startups, and innovation-driven enterprises, the government anticipates a boost in economic activity and the emergence of new job opportunities.
Incentives will be offered under the policy to facilitate the establishment of manufacturing units, equipment and component suppliers, precision engineering units, and maintenance, repair, and overhaul (MRO) services related to the aerospace and defence sector. The classification of projects under the policy is based on investment levels, with manufacturing projects falling into categories such as Large Projects, Mega Projects, and Ultra Mega Projects based on their investment range.
Aerospace and defence units established in Aerospace and Defence parks will receive significant incentives, including 75% reimbursement of state taxes for seven years as an asset creation incentive. Manufacturing units can benefit from a capital grant ranging from 20 to 28%, while service sector units may opt for a capital grant of 14 to 20%, or a turnover-linked incentive of 1.2 to 2% over a 10-year period. The policy also includes provisions to promote job creation through various benefits like employment booster, sunrise booster for initial mega and ultra-mega units, and anchor and thrust boosters.
Mega and ultra-mega units obtaining land from RIICO will enjoy flexible land payment options and lease rental subsidies for office space. Additional benefits offered by the policy include exemptions from banking, wheeling, and transmission charges, flexible land payment models, office space lease subsidies, and the inclusion of investment in captive power plants as eligible capital investment. The Rajasthan government envisions that the new Aerospace and Defence Policy will position the state as a significant contributor to India’s defence manufacturing capabilities, driving industrial growth and employment opportunities.
