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The industry players are also calling for extension of GST exemptions on essential space-related inputs, launch vehicles, ground systems & critical components of Satellites.
The start-ups sought a simplified satellite launch processes, and policy support for space-tech infrastructure, building on the momentum created by the Rs 1,000 crore VC Fund for space startups announced in last budget.
Following a Rs 1,000 crore Viability Gap Funding (VGF) announcement in the 2024 Union Budget, the private space start-up sector is seeking increased financial support in the upcoming Union Budget to accelerate further expansion of the industry.
India has seen a remarkable growth in the number of space start-ups which have increased to nearly 266 since the government opened the largely government-led sector to private players. A separate body – Indian National Space Promotion and Authorization Centre (IN-SPACe) was also created to authorise and oversee their activities and enable co-operation with the Indian Space Research Organization (ISRO).
“Increased R&D funding, tax incentives, and streamlined regulations are essential to foster innovation and strengthen the sector, because the right incentives can position India as the hub for space entrepreneurship,” said Divya Kothamasu, Founder of N Space, a Defence & Aerospace startup, noting that dedicated funding for early-stage space-tech companies can enable them to focus on deep-technology advancement and compete internationally.
The start-ups also sought a simplified satellite launch processes, and policy support for space-tech infrastructure, building on the momentum created by the Rs 1,000 crore VC Fund for space startups announced in last budget. “We expect the VC Fund to become operational in the next 2-3 months with the appointment of the fund manager. In the upcoming budget, we look forward to additional financial incentives from the government to further strengthen India’s space economy and propel this burgeoning industry toward new heights,” said Lt Gen AK Bhatt (Retd), Director General, Indian Space Association.
GST EXEMPTIONS TO LAUNCH VEHICLES, SATELLITE COMPONENTS
In its recommendations to the government, ISpA – which represents private space companies in India – sought recognition of the space sector as “critical infrastructure” to facilitate GST rebates, tax benefits, import duty exemptions, and access to schemes such as the Production Linked Incentive (PLI) for space-grade components. This will enable satellite operators to secure long-term, low-interest loans from scheduled commercial banks and financial institutions.
Another key demand is extension of PLI to Space-grade Components to promote domestic manufacturing, and expansion of GST-exemption to launch vehicles, Ground Systems & Critical components of satellites.
“India’s space budget needs to increase significantly to ensure we have the necessary resources to stay competitive in this highly dynamic industry. It should prioritise key areas such as advanced satellite technologies, space mining, advanced space safety technologies, enhanced cyber capabilities for space security, space debris management, strategic space initiatives like green propulsion systems, reusable launch technologies, and quantum satellite communication technologies,” said Dr Subba Rao Pavuluri, President of SatCom Industry Association (SIA)- India.
MORE FINANCIAL INCENTIVES, BOOST DOMESTIC MANUFACTURING
In its recommendation, the SIA-India has sought setting up of Space Force Command under the Ministry of Defence to oversee defence-related space activities, and ensure coordination with the Defence Space Agency (DSA), ISRO, and other entities. The set of recommendations include more financial incentives for satellite manufacturers and launch service providers, simplification of export regulations through a single-window clearance system, and introduction of Export Credit Insurance to protect smaller companies venturing into global markets.
“Investments should be directed towards domestic manufacturing capabilities for key components like lightweight alloys, space electronics, and optical imaging systems. By investing in the production of high-performance materials like carbon-carbon fibers, space-qualified solar cells, and next-gen propulsion technologies, India can reduce reliance on foreign imports and strengthen its space sector’s self-sufficiency,” it stated.
“The time is ripe for India to have a structured, long-term plan that outlines not just the vision but also the concrete steps and timelines necessary to achieve sustainable growth in the space economy. This plan will provide a clear direction and attract both domestic and international investments. With strategic investments, policy reforms, and targeted initiatives, India can harness the full potential of its space capabilities,” said Anil Prakash, Director General of SIA-India.
