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Karnataka Policy

MSME Incentives in Mysuru District

Under Karnataka Industrial Policy 2025-30, Mysuru city and Nanjangud are Zone 2 while rural taluks like H.D. Kote and Periyapatna are Zone 1. The split-zone character of the district means MSME investors should check the specific taluk before assuming rates — Zone 1 taluks carry meaningfully higher capital subsidy rates than Bengaluru Urban, where the rate is nil under the 2025-30 policy.

Executive Summary

  • Mysuru city and Nanjangud taluks are Zone 2 under 2025-30 — 25% Micro (max ₹25L), 20% Small (max ₹150L)
  • Rural taluks (H.D. Kote, Periyapatna, Hunsur, others) are Zone 1 — 30% Micro (max ₹30L), 25% Small (max ₹200L)
  • Special category rates: Zone 2 — 30% Micro, 25% Small; Zone 1 — 35% Micro, 30% Small
  • KIADB estates at Hebbal, Hootagalli, and Nanjangud industrial area are the main clusters
  • Nanjangud has a specific pharma and electronics character built around established anchor units
  • The Cauvery corridor gives food processing MSMEs specific agro-proximity advantages

Zone 1 and Zone 2 Profile Under 2025-30

Under Karnataka Industrial Policy 2025-30, Mysuru district is a split-zone district: Mysuru city taluk and Nanjangud are Zone 2, while rural taluks including H.D. Kote, Periyapatna, Hunsur, K.R. Nagara, Saraguru, and Saligrama are Zone 1. Zone 2 rates: 25% of VFA for Micro (max ₹25 Lakh) and 20% for Small (max ₹150 Lakh) — general category. Zone 1 rates: 30% Micro (max ₹30 Lakh) and 25% Small (max ₹200 Lakh). Special category rates are higher in both zones. Stamp duty is 100% exempt in both Zone 1 and Zone 2. Electricity tax is exempt for 6 years (Zone 2) or 7 years (Zone 1). Power subsidy of ₹1 per unit for 3 years applies to both zones. Confirm the specific taluk classification against Annexure 6 of GO No. CI 123 SPI 2024(e) before making investment decisions.

The Nanjangud Industrial Character

Nanjangud, 25km from Mysuru, has developed a distinct industrial character around pharmaceuticals and electronics manufacturing. Long-established large units have created a proven anchor environment that attracts MSME ancillary suppliers to the area. A new MSME entering as a supplier to an established Nanjangud anchor unit has a specific, credible market case to build into its DPR market analysis section that goes beyond generic industry statistics.

"Nanjangud gives a Karnataka MSME something rare: a Zone 2 incentive rate (25% Micro, 20% Small) with an established pharma and electronics anchor client ecosystem. Most industrial areas offer one or the other, not both."

Food Processing in the Cauvery Corridor

Mysuru, Mandya, and Chamrajnagar districts constitute Karnataka primary agro-processing geography. Food processing MSMEs benefit from raw material proximity advantages covered in our food processing subsidy guide, including cold chain infrastructure availability that is relevant to DSCR modelling of storage costs.

DN
Deepak Nandana Founder & Principal Consultant MSME Central, Bengaluru

I map and facilitate Karnataka institutional schemes — KIADB, KSFC, DIC, KSSIDC — for businesses across all districts.