Private Space Industry Calls for Budget Support to Accelerate Growth
Ahead of the upcoming Union Budget, India's rapidly expanding private space sector has made a compelling case for enhanced government support. Industry leaders are urging policymakers to formally recognize space assets as critical infrastructure while significantly increasing public procurement of space products and services. These measures, they argue, are essential to unlock financing avenues and accelerate the sector's growth trajectory.
Critical Infrastructure Status: A Game-Changer for Financing
The Indian Space Association (ISpA), in collaboration with consultancy firm Deloitte, has formally recommended that the government classify space infrastructure as a critical sub-sector. This recognition would represent a transformative step for the industry, enabling access to low-cost, long-tenure financing options that could substantially reduce the sector's overall cost of capital.
"Recognizing space infrastructure as a distinct infrastructure sub-sector is absolutely essential to unlock scale, attract private investment, and enhance global competitiveness," emphasized ISpA in its recommendations. The association highlighted that Indian private players have now demonstrated proven capabilities across multiple domains including satellite manufacturing, launch systems, Earth observation data, and ground infrastructure.
Government Procurement: The Missing Anchor for Growth
Industry executives have identified the absence of assured government procurement as a significant constraint hampering sector development. They point to international models where space agencies like NASA source approximately 80% of their systems from private companies, while the European Space Agency procures nearly 90% through industry partnerships.
"Being a big anchor customer, I think government support has to be around," stated Awais Ahmed, founder and CEO of Pixxel Space. He acknowledged recent positive initiatives such as the research, development and innovation fund and the deep-tech fund, but stressed that capital must now start flowing into capital expenditure-heavy businesses that can position India as a global force in both space technology and artificial intelligence.
ISpA reinforced this perspective, noting that "a formal procurement mandate will anchor industry growth while allowing ISRO to focus on strategic and exploratory missions."
Comprehensive Policy Framework Required
Srinath Ravichandran, founder and CEO of Agnikul Cosmos, outlined multiple policy interventions needed to support the sector. "Recognizing space infrastructure as critical infrastructure can unlock low-cost financing, while rationalizing taxes and duties on specialized launch components, along with reducing Customs GST and indirect taxes for deep tech, can significantly alleviate cost pressures," he explained.
Ravichandran also emphasized the need for deeper, outcome-driven collaboration with ISRO and IN-SPACe, along with clearer long-term procurement visibility. Agnikul Cosmos is currently preparing for the maiden orbital flight of its Agnibaan launch vehicle designed to place small satellites in low Earth orbit.
Targeted Fiscal Support and Downstream Development
Suyash Singh, co-founder and CEO of GalaxEye, called for targeted fiscal incentives specifically for indigenous satellite manufacturing and payload development. "Targeted fiscal incentives for indigenous satellite manufacturing and payload development, alongside expanded government-backed funding pools for deep-tech and space missions, can significantly de-risk early deployments," he stated.
Singh highlighted that clarity on long-term procurement, particularly for defense and strategic geospatial applications, would enable startups to plan mission-ready platforms with greater confidence. GalaxEye is actively developing Mission Drishti, an innovative multi-sensor satellite designed for all-weather Earth imaging using both optical and radar data.
The industry leader further suggested that "policy support for downstream commercialization of satellite data through standardized access frameworks and incentives for data adoption can unlock wider economic value while strengthening India's strategic and climate-monitoring capabilities."
Strategic Importance and Economic Impact
ISpA and Deloitte emphasized that space infrastructure plays a critical role across multiple sectors including telecommunications, defense, navigation, finance, weather forecasting, disaster management, and governance. Their analysis suggests that formal recognition as critical infrastructure could reduce financing costs by 2–3 percentage points while significantly strengthening national resilience.
The industry body proposed several specific measures including that all ministries, state governments, and urban local bodies procure satellite imagery and geospatial data exclusively from empanelled Indian companies. They also recommended implementing a geo-tagging framework for space entities and authorized users, along with appropriate restrictions on access to sensitive satellite data to ensure security and regulatory compliance.
Focus on Talent Development and Defense Integration
Krishanu Acharya, co-founder and CEO of Suhora Technologies, emphasized that the Budget should prioritize accelerating the downstream space economy, particularly in converting satellite data into actionable intelligence. "With increasing adoption and demand for geospatial intelligence among the government and defense agencies, we also want to propose a specialized fund for skilling talent pipelines and academia on priority use cases," he stated.
Acharya added that higher allocations for satellite data analytics in the defense sector could substantially support intelligence, surveillance and reconnaissance (ISR) capabilities, terrain monitoring, and maritime domain awareness. He stressed the importance of integrating Made-in-India private solutions into defense operations to enhance national security capabilities.
The collective industry recommendations present a comprehensive roadmap for transforming India's space sector through strategic policy interventions, financial support mechanisms, and enhanced government-industry collaboration as the country positions itself as a significant player in the global space economy.
