Executive Summary
- Karnataka's Cluster Development Programme provides common facilities, testing labs, and shared equipment
- Applications are made collectively by a group of MSMEs in the same geographic and sector cluster
- Central and state funding support reduces the individual MSME cost burden for infrastructure
- Active clusters include leather goods (Bengaluru), silk weaving (Mysuru), engineering (Peenya)
What Cluster Development Provides
The MSME Cluster Development Programme, implemented in Karnataka through the state industry department in coordination with the central MSME Ministry, develops collective infrastructure for industrial clusters — Common Facility Centres (CFCs) with shared equipment, testing and quality certification laboratories, design centres, and raw material banks. These provide individual MSMEs access to capabilities they cannot economically build independently.
How Clusters Access the Programme
The programme is accessed collectively — a group of MSMEs in an identified cluster forms a Special Purpose Vehicle (SPV) or cooperative structure, applies jointly for CFC development, and the government provides a defined funding share with the balance from SPV member contributions. Individual MSMEs cannot apply independently; the collective structure is mandatory.
Active Karnataka Clusters
Karnataka has established cluster development projects across multiple sectors: leather goods and footwear in Bengaluru's Rajajinagar area, silk weaving in Mysuru and Channapatna, engineering and auto components in Peenya, and handloom textiles in Dharwad. Businesses in these geographic and sector clusters should check whether an active CFC is accessible to them before investing in individual capabilities.