“With our continued emphasis on expanding the space economy by five times in the next ten years, a venture capital fund of Rs 1,000 crore will be set up,” Sitharaman said while presenting the Budget.
The industry welcomed the move, though seeking more tangible incentives for widespread growth. “Since the space sector is strategic and critical for the country, the FM has called for continued emphasis on expanding the Indian space economy by five times and establishment of a space-focused venture capital fund to ensure we have a more significant chunk of the global space economy,” Gautam Sharma, MD of American satellite company Viasat said.
However, he added that more could have been done to give a bigger fillip to the industry which is a developed phase right now. “The government could have announced more incentives to boost growth in the space sector through import holidays, tax holidays, productivity-linked incentive (PLI) scheme, low-interest financial loans, and lower GST rates,” Sharma said.
Rahul Saxena, co-founder of satellite analytics company AiDash
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said the Indian space sector has made rapid strides since the entry of private players, with 55 active space assets currently. “The number of startups has surged from just one or two a few years ago to over 200 now. IN-SPACe has received more than 400 applications from startups seeking assistance. However, challenges remain in attracting private investment due to the sector’s nascent stage, limited market, availability of indigenous materials, and commercialization hurdles,” Saxena said, adding that a government-supported VC fund will be a “significant step” toward fostering industry growth. “This is in addition to the approximately Rs 4,400 crore capex allocated by the Union government for the space sector.”
Saxena said the government can further support the space sector by accelerating the adoption of space technology in disaster management, agriculture, defence, and infrastructure. “Currently, India’s space economy is valued at around $8 billion; such initiatives will help boost India’s ambition to grow this to four times by 2030.”
Lieutenant General AK Bhatt (Retired), DG of Indian Space Association (ISpA), said the creation of the VC fund demonstrates the govt’s commitment to the sector. “We had previously advocated for increased financial incentives to support the burgeoning space startups. The announcement of a VC fund is a step forward, addressing the funding challenges faced by these nascent ventures in this capital-intensive domain. Additionally, with the proposal for establishment of twelve industrial parks across the country, we hope will include the space sector as this will provide a substantial boost to the space and satellite manufacturing industry. These measures are pivotal for the growth and development of India’s space ecosystem.”
