In what has brought relief to thousands of farmers but sparked fresh challenges for the government, Karnataka has officially withdrawn its plan to acquire around 1,777 acres of fertile farmland across Channarayapatna and surrounding villages near Devanahalli for industrial and aerospace expansion. While this move ends a years-long tussle with local communities, it has also raised questions about the state’s ability to hold on to large-scale investments in this crucial sector.
Andhra’s opportunistic push
Following Karnataka’s retreat, neighbouring Andhra Pradesh has wasted no time in attempting to lure the same aerospace investors who were eyeing Devanahalli. Chief Minister Chandrababu Naidu’s administration has rolled out a red carpet, presenting companies with thousands of acres ready for immediate use, sweetening the deal with incentives and speedy clearances.
This push isn’t random — Andhra is cleverly focusing on Penukonda and Madakasira, border towns in its Sri Sathya Sai district that sit right next to Karnataka’s Chikkaballapur and Tumakuru regions. Both locations are barely 80 kilometres from Bengaluru’s Kempegowda International Airport, giving companies the strategic advantage of operating from Andhra while depending on Bengaluru’s robust infrastructure and skilled workforce.
‘We won’t force farmers,’ says CM Siddaramaiah
Earlier this week, Chief Minister Siddaramaiah made it clear that his government will no longer forcefully acquire land for the proposed aerospace park near the international airport. “Only willing farmers’ land will be taken. We want to balance protecting farmland with industrial growth and job creation,” he stated while announcing the decision on July 15.
The announcement came as a major victory for farmers who had camped in protest for over three years, but it has simultaneously thrown a wrench into Karnataka’s ambitious plans for attracting aerospace investments. Officials admit the shelved project could have brought in capital worth Rs 50,000–60,000 crore, created thousands of employment opportunities, and boosted revenue through taxes and industrial growth.
Companies now at crossroads
With the project near Devanahalli scrapped, companies that were preparing to establish operations there are now reassessing their options. The big question is whether Karnataka can redirect them to other suitable regions fast enough, or whether Andhra’s aggressive pitch will win them over.
Andhra’s quick reaction underscores its strategy. State IT Minister Nara Lokesh, son of Naidu, has publicly urged companies to consider Andhra instead. The promise: 8,000 acres of land with quick approvals, financial incentives, and the benefit of Bengaluru’s logistical ecosystem — without paying Bengaluru land prices.
A senior official from Karnataka’s Industries Department acknowledged that the real hurdle is not the lack of land in the state, but Andhra’s smart offer that gives investors the best of both worlds. “We can easily find 1,000 acres elsewhere in Karnataka,” the official noted. “But when another state gives land for cheap and companies still get to use Bengaluru’s airport and manpower, it becomes a serious challenge.”
Industries Minister MB Patil, however, remains confident that Karnataka can hold its ground. Speaking to reporters, he said the state has ample industrial plots available in other districts like Tumakuru, Mysuru, Bagalkote, and Chamarajanagar. He also highlighted that the state has already committed Rs 3,600 crore to develop supporting infrastructure like water supply and utilities for new industrial zones.
Dismissing Andhra’s offer as “shallow,” Patil argued, “Industries don’t just move for cheap land. They need a robust ecosystem, skilled people, and value-added facilities. That is where Karnataka continues to lead.”
He pointed out that Karnataka accounts for a bulk of India’s aerospace exports — roughly 65% — and is globally recognised as one of the top three aerospace hubs. “This is not just about aerospace either. We’re ready for next-gen sectors like AI and deep-tech too,” he asserted.
BJP condemns Karnataka govt’s move
The state BJP has condemned the state governments move to scrap the project which would hamper development of state. The BJP alleged that the government failed to convince the farmers to give land for project. State BJP president BY Vijayendra accused Siddaramaiah’s administration of driving industries out of Karnataka and creating an atmosphere of uncertainty for investors.
Despite Andhra Pradesh’s open invitation, no major aerospace company has so far publicly confirmed a relocation. State officials insist that negotiations are underway to reassure companies and provide them with alternate land options within Karnataka.
Yet the concern remains real: If even a handful of big players cross the border to set up base in Penukonda or Madakasira, Karnataka could end up in the awkward position of losing investment while still providing the critical transport and labour backbone that supports those very industries.
