As the country gears up for the presentation of the Union budget, it is worth recalling that the government’s budget for the space sector has been modest, typically ranging between Rs 12,500 crore and Rs 13,500 crore. However, recent initiatives, such as Chandrayaan 3 and Aditya L-1, along with significant changes in the sector, have sparked a new optimism for India’s growing space industry.
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The budget for the Department of Space (DoS), which manages the ISRO, had increased significantly by 17.81 per cent in the interim budget for 2024-2025. In the revised Budget for 2023-2024, the DoS received Rs 11,070.07 crore. This amount rose to Rs 13,042.78 crore in the interim budget for 2024-2025. The Indian National Space Promotion and Authorisation Centre (IN-SPACe), which regulates space activities in the country, also saw its budget rise from Rs 60.35 crore in 2023-2024 to Rs 96 crore in 2024-2025.
A few industry stakeholders and players feel that a lot more can be done by the government for the space segment in India and have valid suggestions for the same. “As ISRO’s budget should grow commensurate with its ambitions for Gaganyaan and other space exploration objectives, it would have a great impact if the budget allocated for IN-SPACe were multiple times what it was before, as this can benefit hundreds of startups, creating a vibrant space ecosystem with innovation and growing India’s global market share,” remarked Pawan Chandana, co-founder, Skyroot Aerospace.
Many other stakeholders say in order to secure India's position as a global leader in space technology, the government can allocate a significant portion of the budget to ISRO to ensure the organisation can provide competitive salaries and working conditions for its employees. There is also a need to establish a separate fund for deep-tech space startups.
“Establish a dedicated fund for deep-tech startups in the space sector, and provide them with the necessary resources and support to thrive. The budget allocation for a start-up should not be a fixed grant of say Rs 50 lakhs or Rs 1 crore. Along with the ISRO budget, there should be an exclusive budget for the space start-ups as the space sector will see significant boom in the next 10-15 years. There would be a heavy space race and the business that we will get in this sector would be humongous. At the same time, steps should be taken to streamline the funding process for start-ups by creating a transparent and efficient system that minimises bureaucratic hurdles and encourages international collaborations and partnerships to leverage global expertise and resources,” said Srimathy Kesan, founder and CEO of Space Kidz India, which is into design, fabrication, and launch of small satellites, spacecraft and ground systems.
She added that a grant of Rs 1 crore or Rs 50 lakh is highly insufficient for cutting-edge space technology and this industry requires a few millions and a minimum of two-five years to validate any new innovation. This period needs to be given to a few start-ups who promise to work on such innovations. “Many of the VC funds do not realise that the ROI from space start-ups do not come immediately and the results take time. So, the government needs to step in and increase the budget exclusively for space tech start-ups so that the brain talent does not go away to the West. Also, the prices for the testing facilities within ISRO should be slashed further. There should also be an accelerator programme that supports and brings in more VC to this industry,” said Kesan.
A few experts also suggest that though the Indian Space Policy, 2023, and the guidelines from IN-SPACe are forward-looking, they do not have legal support. “To create a stable environment that encourages private involvement, it is essential to introduce thorough legislation. Revisiting the inactive Space Activities Bill from 2017 could clarify IN-SPACe’s role and responsibilities, include industry input and improve the appeal process for space-related approvals. At the same time, space-tech start-ups struggle with funding because they require a lot of money and take a long time to develop their projects. Establishing a dedicated debt fund under the Alternative Investment Fund (AIF) regulations, which offers better borrowing conditions and is backed by a Credit Guarantee Scheme for Startups, could help overcome the tough ‘Valley of Death’ phase. Additionally, providing tax incentives and rebates could encourage private investors and growth capital to support space startups,” pointed out space expert Girish Linganna.
Linganna feels that by expanding GST exemptions to include more space activities, such as ground systems, satellite components and launch vehicles, along with lowering customs duties and withholding taxes, would improve profit margins in the space sector. These financial changes would support the supply chain and boost global competitiveness by allowing lower prices for consumers.
“Government procurement policies should focus on using homegrown space products and services, helping them to be integrated into such areas as agriculture, disaster management and infrastructure. Utilising such technologies as earth observation data as Digital Public Infrastructure can improve public services and demonstrate the value of space-tech innovations. Also, expanding the production-linked incentive (PLI) scheme to include the space sector will encourage domestic manufacturing and support the government’s ‘Make in India’ initiative. This PLI programme in the space industry will not only promote local production, but also create a supportive environment for new businesses, leading to more jobs and economic growth. At the same time, there should be efforts in establishing a single platform for easy intellectual property (IP) registration and cyber security to protect the innovations of Indian space-tech startups,” said Linganna.
If one does a comparative analysis of space budgets with other countries, it would appear that countries such as the United States and China spend a whole lot of money on space. The United States leads global space exploration with a robust budget of approximately $27 billion for NASA in the fiscal year 2024. This represents about 0.28 percent of the US GDP, reflecting a strong commitment to deep space missions, Mars exploration, and the Artemis programme, which aims to return humans to the Moon by 2024. On the other hand, China's space programme has been rapidly advancing, with a budget of around $24.75 billion for the fiscal year 2024. This substantial investment supports China's ambitious projects, including the Chang'elunar exploration missions and the Tianwen Mars missions. China's space budget represents a significant portion of its GDP, emphasizing its strategic focus on space infrastructure and technology.
The future of space exploration hinges on advancements in deep technology, particularly in human transportation and tourism. Developing reliable and cost-effective means for humans to travel to and from space is essential. Countries like the US and China are investing heavily in these areas, and India must follow suit to remain not only competitive but, to attract more business.
