₹1,000 crore VC fund to boost India's space economy

The Indian space industry has welcomed the government’s decision to set up a ₹1,000 crore venture capital fund to support startups in the sector. The announcement was made during the presentation of Union Budget 2024-25 by finance minister Nirmala Sitharaman in Delhi on July 23.

The Budget also saw customs duty exemption for close to 25 critical minerals used in technology intensive sectors like the space sector to help expand the country’s space economy.

"The Union budget's vision to grow India's space economy by five-fold in the next decade demonstrates the government's strong commitment to this sector. The announcement of a ₹1,000 crore VC fund is a step forward, addressing the funding challenges faced by these nascent ventures in this capital-intensive domain," says Lt. Gen. AK Bhatt (Retd.), director general, Indian Space Association (ISpA).

He also hoped that the Budget proposal to establish 12 industrial parks across India will include the space sector too.

“The fund along with the existing policies for the space sector will fuel technological innovation and create a fertile ground for non governmental entities to thrive," Pawan Goenka, chairman, IN-SPACe (Indian National Space Promotion and Authorization Centre) says.

The SatCom Industry Association (SIA-India) pointed out that the expansion of India’s space economy is set to impact various sectors, from satellite-based services in agriculture and disaster management to advanced communication systems and space exploration missions. While the announcement of venture fund for space sector is welcome, comprehensive support for startups is essential, the association says.

“Every rupee invested promises substantial returns, as the space sector holds immense potential for contributing to GDP growth and enhancing national infrastructure. A comprehensive support which includes tax incentives, regulatory clarity, and the government acting as an anchor customer can ensure sustained demand and funding for our burgeoning space economy," Anil Prakash, DG, SIA-India, says.

"Continued with the demand for thematic sovereign funds, the FM announcement on Space-focussed VC fund is a highly welcome step. This continues to accentuate the Government's commitment towards nurturing and growing the space economy, and will provide a lot of comfort to domestic and global investors alike, complemented with abolition of Angel Tax," Apurwa Masook, CEO, SpaceFields, says.