Seeking to decongest Bengaluru and spread economic growth, Karnataka’s draft IT Policy 2025-30 unveiled on 14 November proposes generous incentives for companies that open offices in Tier-II and Tier-III cities such as Mysuru, Mangaluru and Hubballi. Rebates include 100 percent reimbursement of commercial rent for three years, refunds of property tax and electricity duty, and telecom-expense subsidies.
The state will also expedite single-window approvals for zoning clearances and offer 30 percent capital investment subsidies on greenfield campuses. Officials estimate the scheme could shift up to 150,000 tech jobs—roughly 10 percent of Bengaluru’s current IT workforce—over the next five years.
![Karnataka Offers Tax & Rent Rebates to Relocate Tech Jobs Beyond Bengaluru]()
For global mobility teams, the policy creates fresh relocation destinations within India, potentially easing salary pressures linked to Bengaluru’s soaring cost of living. Companies may need to adjust hardship allowances, housing budgets and schooling options when transferring staff to smaller cities.
Real-estate developers have already announced 4.2 million sq ft of Grade-A office projects across Mysuru and Mangaluru in anticipation of demand. However, concerns remain around last-mile connectivity and international flight access; most secondary cities rely on Bengaluru or Hyderabad for long-haul connections, adding travel time for client visits.
The draft is open for public comment until 30 November, after which it will be tabled in the state assembly. Mobility and HR leaders should monitor final guidelines on hiring quotas, as earlier drafts mooted a 70 percent local workforce requirement for incentive eligibility.
The state will also expedite single-window approvals for zoning clearances and offer 30 percent capital investment subsidies on greenfield campuses. Officials estimate the scheme could shift up to 150,000 tech jobs—roughly 10 percent of Bengaluru’s current IT workforce—over the next five years.
For global mobility teams, the policy creates fresh relocation destinations within India, potentially easing salary pressures linked to Bengaluru’s soaring cost of living. Companies may need to adjust hardship allowances, housing budgets and schooling options when transferring staff to smaller cities.
Real-estate developers have already announced 4.2 million sq ft of Grade-A office projects across Mysuru and Mangaluru in anticipation of demand. However, concerns remain around last-mile connectivity and international flight access; most secondary cities rely on Bengaluru or Hyderabad for long-haul connections, adding travel time for client visits.
The draft is open for public comment until 30 November, after which it will be tabled in the state assembly. Mobility and HR leaders should monitor final guidelines on hiring quotas, as earlier drafts mooted a 70 percent local workforce requirement for incentive eligibility.
