Rajasthan Aerospace & Defence Policy 2026

Mechanism

The Rajasthan Cabinet approved the policy on 21 January 2026, operative immediately upon approval. It is the state's first standalone aerospace & defence sectoral policy, complementing the simultaneously approved Rajasthan Semiconductor Policy 2026 and creating a paired high-technology industrial cluster strategy.

Project classification tiers:

Incentive menu:

• Units located in designated Aerospace & Defence parks: 75% reimbursement of state taxes for 7 years
• Manufacturing units: capital grant of 20–28% of fixed-capital investment (tier-dependent)
• Service-sector units: capital grant of 14–20%, or turnover-linked incentive of 1.2–2% of turnover for 10 years
• Employment-linked benefits (per-employee subsidy for direct and indirect job creation)
• Flexible land payment options within A&D parks
• Lease rental subsidies for office and R&D space
• Exemption or full reimbursement of electricity duty, mandi fee, and stamp duty

Sectoral perimeter: aircraft, helicopters, drones (UAV/UCAV), missiles, avionics, satellite buses, armoured vehicles, radars, navigation/communication/control systems, robotics, defence electronics, Maintenance-Repair-Overhaul (MRO) services, and dual-use components.

Alignment with national architecture: The policy explicitly cross-references the Defence Production and Export Promotion Policy (DPEPP), iDEX (Innovations for Defence Excellence), Atmanirbhar Bharat, and the Make in India defence-manufacturing mandate. This provides state-level incentive delivery for the national IDDM (Indigenously-Designed-Developed-Manufactured) procurement preference — the state subsidy layer reduces the investment hurdle for domestic OEMs and system integrators seeking IDDM certification.

Strategic geography

Rajasthan's western-border geography (long India–Pakistan border, Indo-Tibetan Border Police, BSF and ITBP operational footprints) gives the state a natural drone-cluster positioning relevant to the post-Galwan / post-Balakot border-surveillance demand stack. The Jodhpur–Pali–Beawar–Ajmer aerospace corridor leverages: existing IAF airbases (Jodhpur Air Force Station, Suratgarh), HAL legacy presence in Kota, proximity to Northern Command operational logistics.

Downstream implications

• Fills the first Rajasthan A&D filing on the register; pairs with the Semiconductor Policy 2026 filed the same day to establish Rajasthan's dual high-technology industrial platform
• State incentive layer operationalises the 74% FDI cap on defence manufacturing under the consolidated FDI policy — foreign OEMs investing via the Strategic Partnership route can stack central-GOI + state-Rajasthan incentive menus
• Drone manufacturing focus is directly material to the post-Galwan border-surveillance procurement surge and the PLI-Drones scheme: Rajasthan A&D parks provide the locational delivery mechanism
• MRO scope (civilian + military) aligns with India's ambition to develop domestic MRO capacity to reduce the ~₹15,000 crore/year spent on overseas maintenance

Open questions

• No Rajasthan Defence-Industrial Corridor (DIC) has been formally designated — the policy creates the incentive architecture but the physical cluster node (Jodhpur–Pali–Ajmer corridor) has not been anchored by a central DIC notification equivalent to the Tamil Nadu or Uttar Pradesh DICs
• Timeline for Aerospace & Defence park gazette notification and land-allocation tender not specified in the Cabinet approval communiqué