Rajasthan Aerospace and Defence Policy: Rajasthan to Emerge as an Aerospace and Defence Manufacturing Hub

Jaipur, January 2026: Under the able leadership of Chief Minister Shri Bhajanlal Sharma, the State Government is working with a multi-dimensional development policy to achieve the goal of a developed Rajasthan. Several important decisions have been taken to accelerate progress in sectors such as agriculture, energy, drinking water, education, infrastructure, healthcare and industry. In this direction, the State Government has introduced the Rajasthan Aerospace and Defence Policy to strengthen self-reliance in aerospace and defence manufacturing and services, and to enhance Rajasthan’s contribution to the nation’s aerospace and defence manufacturing achievements.

This policy will promote defence and space technology in the state and help establish Rajasthan as a major hub for aerospace and defence manufacturing. Focused on attracting large investments as well as developing MSMEs, startups and an innovation-driven ecosystem, the policy will also boost economic growth and employment generation. It will encourage the establishment of manufacturing enterprises, equipment and component manufacturers, suppliers, precision engineering units, and maintenance, repair and overhaul (MRO) facilities in the aerospace and defence sector across the state.

Manufacturing and Service Projects Categorised into Three Levels:
Under the policy, manufacturing projects with fixed capital investment of ₹50 crore to ₹300 crore will be classified as Large, investments from ₹300 crore to ₹1,000 crore as Mega, and investments above ₹1,000 crore as Ultra Mega. In the service sector, projects with fixed capital investment of ₹25 crore to ₹100 crore will be Large, ₹100 crore to ₹250 crore as Mega, and investments above ₹250 crore as Ultra Mega.

Incentives for Manufacturing and Service Sector Projects:
Eligible aerospace and defence manufacturing and service enterprises set up in A&D parks will receive an investment subsidy in the form of 75 percent reimbursement of state taxes for seven years as an asset creation incentive. Additionally, enterprises can choose either a capital subsidy—ranging from 20 to 28 percent for manufacturing and 14 to 20 percent for services, disbursed over ten years—or a turnover-linked incentive of 1.2 to 2 percent, payable annually for ten years.

Further, top-up incentives such as 10 to 15 percent Employment Booster, 25 percent Sunrise Booster for the first three Mega or Ultra Mega units, 10 percent Anchor Booster, and 20 percent Thrust Booster will also be provided. Mega and Ultra Mega manufacturing enterprises acquiring land from RIICO will be eligible for flexible land payment for ten years and 25 percent lease rental subsidy on office space for five years.

Special Incentives for Investors:
The policy also provides special incentives, including exemptions on banking, wheeling and transmission charges, a flexible land payment model, office space lease rental subsidy, and inclusion of 51 percent of investment in captive power plants as eligible fixed capital investment. To provide long-term relief to industries, the policy offers 100 percent exemption from electricity duty for seven years, 100 percent reimbursement of mandi or market fees for seven years, 75 percent exemption and 25 percent reimbursement of stamp duty and conversion charges. Provisions such as green incentives, skill and training incentives, and intellectual property creation incentives further enhance the attractiveness of the policy.