Karnataka's New KIADB FAR Norms: A Strategic Shift in Urban and Industrial Growth

Karnataka's move to introduce very liberal building norms for areas under Karnataka Industrial Areas Development Board (KIADB) is undoubtedly a turning point in the state's industrial and real estate ecosystem. By permitting a floor area ratio (FAR) of up to 5.2 through the payment of a premium, the government has effectively allowed the development of taller, denser, and more integrated projects along the industrial corridors and emerging peripheral zones of Bengaluru.

The reform is seen as a major structural change aimed at making land use more productive, increasing the pace of industrial development, and making Karnataka more attractive as a manufacturing and investment destination. Industry experts believe the new rules might change the layout of factory floors, commercial complexes, logistics parks, data centers, and residential townships whose mainstay is industrial activities.

What has changed after the new KIADB rules? Industrial plots adjacent to roads with a width of over 30 metres were earlier allowed an FAR of 3.25. As per the new regulations, these plots may now get an FAR of up to 5.2 with the payment of a premium. This considerably raises the total permissible constructed area on the same piece of land.

The updated rules introduce a graded FAR structure based on road width: - Roads wider than 30 metres allow FAR up to 5.2 - 24–30 metre-wide roads permit FAR up to 4.8 - 18–24 metre-wide roads allow FAR up to 4.0 - 12–18 metre-wide roads permit FAR up to 3.6

Importantly, the changes are not limited to industrial estates but also cover special investment regions, single-unit industrial complexes, infrastructure projects, and integrated developments within KIADB-notified areas. This includes projects with commercial and residential components, thereby enlarging the sphere of impact significantly.

The evolution to vertical growth and increasing land productivity is the main focus of the reform. As land in and around Bengaluru becomes more limited and costly, the government is motivating industries and developers to build multi-storied structures instead of expanding horizontally. This shift is expected to encourage: - Vertical factories and multi-level warehouses - Integrated logistics and data center campuses - Mixed-use industrial hubs combining workspaces and support infrastructure

This is especially true for industries such as electronics manufacturing, aerospace, automotive, data centers, and supply chain infrastructure, which demand large built-up spaces but work on restricted land footprints.

The policy aligns with the overall ease of doing business agenda of Karnataka. The state is encouraging efficient land use for manufacturing, employment generation, and economic activities, increasing productivity while reducing the need for land acquisition.

One of the most direct effects will be felt in the industrial corridors of Bengaluru and its peripheral growth zones where KIADB estates are concentrated. Consequently, places like Bagalur, Hoskote, Devanahalli, Bidadi, and other nearby areas might experience a spike in development activity. The increased FAR gives a big boost to project feasibility, reducing the need for large land purchases and accelerating project initiation. This is likely to attract institutional investors and big occupiers looking for scale.

At the same time, the value of land in these micro-markets is likely to hold steady and gradually increase as the potential for development grows and local infrastructure improves.

Initially, the influence on the existing residential neighborhoods of Bengaluru will be minimal because the policy targets KIADB-notified industrial areas, not inner-city residential areas. However, the densification of industrial clusters and rapid employment generation are likely to increase demand for nearby housing. This can motivate the creation of well-planned residential townships, rental housing, and worker accommodations in the vicinity of industrial hubs.

Such mixed-use developments can significantly reduce long commuting times, alleviate pressure on central Bengaluru, and facilitate more balanced urban expansion.

Industry experts list the clear advantages of the revised norms as better land utilization, improved project economics, reduced dependency on land aggregation, and the facility to develop mixed-use industrial ecosystems featuring manufacturing, logistics, offices, housing, and retail. A higher FAR is also conducive to more efficient infrastructure planning, as services can be concentrated in defined zones instead of being dispersed in sprawling developments.

However, some experts warn that higher densities should be backed by the right kind of infrastructure. Roads, power supply, water, sewage systems, and public transport facilities must support the pace of development. If not planned well, the problems of congestion and overload of civic amenities may not be limited to the center but can spill over to the suburbs.

Urban planners maintain that it is crucial to monitor cumulative density effects, especially in situations where the residential component is mixed with industrial uses.

Essentially, the easing of KIADB building regulations indicates that Karnataka is making a fundamental change in its industrial and urban development policy. By encouraging vertical growth, integrated planning, and land use efficiency, the state is preparing itself to embrace further economic growth without uncontrolled urban sprawl. If the changes to the FAR regulations are accompanied by timely infrastructure improvements and proper implementation, they have the potential to dramatically alter the cityscape of Bengaluru, revitalize industrial corridors, and lead to the development of more sustainable and employment-oriented urban areas throughout Karnataka in the coming decade.