Rajasthan unveils Aerospace & Defence Policy 2026 to attract investments, create jobs, and strengthen state’s defence manufacturing ecosystem.
Jaipur: The Rajasthan government has unveiled a new Aerospace and Defence Policy aimed at establishing the state as a prominent hub for aerospace and defence manufacturing.
Announced on Wednesday, the policy is expected to attract investments, create jobs, and accelerate industrial growth throughout the state.
Under the leadership of Chief Minister Bhajan Lal Sharma, Rajasthan is pursuing a comprehensive development strategy that includes key sectors such as agriculture, energy, education, health, infrastructure, and industry, with aerospace and defence now receiving focused priority.
The policy is designed to strengthen Rajasthan’s role within India’s aerospace and defence manufacturing and services ecosystem. It seeks to attract large-scale investments while fostering MSMEs, startups, and innovation-driven enterprises, thereby boosting economic activity and generating employment opportunities.
Incentives under the policy include support for manufacturing units, equipment and component suppliers, precision engineering units, and maintenance, repair, and overhaul (MRO) services within the aerospace and defence sector.
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Projects under the policy are classified based on investment: manufacturing projects are categorized as Large (Rs 50–300 crore), Mega (Rs 300–1,000 crore), and Ultra-Mega (above Rs 1,000 crore). Service sector projects are classified as Large (Rs 25–100 crore), Mega (Rs 100–250 crore), and Ultra-Mega (above Rs 250 crore).
Eligible aerospace and defence units in designated 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 20–28%, while service sector units may choose a capital grant of 14–20% or a turnover-linked incentive of 1.2–2% over ten years.
To encourage employment, the policy provides additional incentives such as employment boosters, sunrise boosters for initial mega and ultra-mega units, and anchor and thrust boosters. Mega and ultra-mega units acquiring land from RIICO will benefit from flexible land payment options and office space lease subsidies.
Other benefits include exemptions from banking, wheeling, and transmission charges, flexible land payment models, and recognition of investments in captive power plants as eligible capital investment.
The Rajasthan government believes that this new Aerospace and Defence Policy will position the state as a key contributor to India’s defence manufacturing capabilities, while fostering industrial growth and job creation.