While the official budget allocation for India’s space program in 2025-2026 is yet to be announced, one can anticipate a few key trends and priorities based on the previous year’s budget and the evolving landscape of the space sector. The government’s financial commitment to space advancement is evident in recent budget allocations, with Rs 13,042.75 crore for (2024-2025), Rs 12,543.91 crore (2023-2024) and Rs 13,700.00 crore for (2022-2023).
While these allocations reflect substantial support, stakeholders in the space segment found that critical funding gaps still persist. The previously earmarked Rs 1,000-crore space sector fund awaits clear distribution guidelines, while current accelerator programs offering Rs 10-50 lakh to space startups fall short of industry needs. Experts advocate for more robust funding mechanisms, suggesting minimum allocations of Rs 8.2 crore per venture to ensure sustainable growth and innovation.
India’s space startup ecosystem exemplifies technological entrepreneurship at its finest. There are many companies taking the lead in innovation while advocating for progressive policies and modernized investment frameworks. It is expected that the establishment of a dedicated space venture fund and production-linked incentives could significantly accelerate both international collaboration and domestic manufacturing capabilities.
“Cost considerations present both challenges and opportunities. High import duties and taxes currently impact sector growth, yet strategic reforms—including reduced duties on critical components and enhanced R&D tax benefits could substantially lower launch costs. India’s reputation for cost-effective satellite launch services, competing with global leaders like SpaceX, China’s Long March programme, and Europe’s Ariane systems, positions it favourably in the international market, but the same launch cost applied for the Indian startups, MSMEs, and academia needs to be revisited and considerable waivers to be worked,” remarked Srimathy Kesan the Founder and CEO of Chennai-based Space Kidz.
Stakeholders in the space sector feel that though ISRO’s testing facilities are playing a crucial role in advancing this sector, there is a pressing need for a full-fledged test facility in Sriharikota. Currently, many in the southern region have to travel to Ahmedabad or Bengaluru for testing, making accessibility a challenge. Establishing such a facility in Sriharikota would provide easier access and strengthen India’s space infrastructure.
“There is also a need to establish a dedicated space research park. For the past five years, experts have emphasized the need for a facility that hosts simulators and advanced training equipment for students. Currently, Indian students must travel to NASA and ESA for hands-on space experiences, leading to significant capital outflow from India. A well-developed space research park in India would not only enhance domestic capabilities but also serve as a premier destination for Southeast Asia and the Middle East, regions currently lacking such facilities,” said Kesan.
She further feels that strategic budget allocation could substantially amplify India’s influence across the global space landscape. “A robust space sector naturally enhances critical services, including telecommunications, weather monitoring, disaster response, and navigation systems, generating value for both domestic and international stakeholders. While the sector addresses challenges in regulatory processes, infrastructure development, and talent retention, it continues to demonstrate remarkable adaptability and resilience,” added Kesan.
Experts point out that considering the government’s focus on space and the burgeoning private space industry, one can anticipate an increase of approximately 15-20 per cent in budget allocation for the space segment, potentially taking the allocation to Rs 15,000-16,000 crore.
“Further incentives and support for private space companies are anticipated, potentially through expanded PLI schemes with an additional outlay of Rs 500-700 crore, tax benefits, and streamlined regulations. Investments in space infrastructure, including launch facilities, testing centres, and ground stations, are likely to be prioritized, with an estimated allocation of Rs 3,000-4,000 crore. Additionally, it is also expected that there would be an increase in funding for research and development in emerging space technologies like AI, robotics, and advanced propulsion systems potentially in the range of Rs 1,500-2,000 crore,” pointed out space expert Girish Linganna.
Few experts observe that one crucial aspect of the budget could be investment in skilling and training programs to develop a skilled workforce for the growing space sector. This could involve Rs 200-300 crore allocated towards specialized courses, scholarships, and collaborations with educational institutions. The budget may also include provisions for enhanced international collaboration in space exploration and research, with an estimated allocation of Rs 500-800 crore.
“As India prepares for its first human spaceflight, the Gaganyaan mission is likely to receive substantial funding for further development and testing, potentially around Rs 3,000 crores. Similarly, missions such as Chandrayaan-4 and VOM will also require continued financial support to ensure their successful completion, with an estimated allocation of Rs 1,000 - 1,500 crores each.
At the same time, the budget may allocate funds for expanding the use of space technology for various applications, including agriculture, disaster management, and communication, with an estimated allocation of Rs 2,000 to Rs 2,500 crores. Also, with growing concerns about space debris and security threats, investments in space situational awareness capabilities are expected, potentially around Rs 800-1,000 crore,” observed Linganna.
