Budget 2024: Indian aerospace sector flies high as FM Sitharaman allocates Rs 1000 crore for space tech

In a significant move to boost India’s aerospace sector, Finance Minister Nirmala Sitharaman announced a substantial allocation of ₹1,000 crore for space technology development in the Union Budget 2024. This funding is set to support over 180 government-recognized space technology startups across the country, fostering innovation and growth in the space industry.

This announcement follows the Economic Survey 2023-24, which highlighted the remarkable progress India has made in the space sector over recent years. The survey detailed advancements in rockets, satellites, spacecraft, and ground infrastructure, emphasizing the sector’s critical role in the nation’s technological and economic landscape.

India currently boasts 55 active space assets, including 18 communication satellites, nine navigation satellites, five scientific satellites, three meteorological satellites, and 20 Earth observation satellites. These assets underscore India’s growing capabilities in space exploration and utilization.

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Finance Minister Sitharaman’s proposal to establish a ₹1,000 crore venture capital fund aims to stimulate further advancements in space technology. This fund is expected to enhance India’s position in the global space industry, encouraging private sector participation in space exploration and commercialization. By providing financial support and incentives, the government seeks to accelerate the development of cutting-edge space technologies and foster a robust ecosystem for space startups.

Says Srinath Ravichandran, Co-Founder and CEO, Agnikul Cosmos. “It is a wonderful news for all of us in the sector. This will help larger players emerge out of India’s space startup ecosystem. This also shows that the Government is continuing to strongly back its vision of making India have a larger chunk of the global space economy.”

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Lt. Gen. AK Bhatt (Retd.), Director General, Indian Space Association (ISpA) said “The Union budget’s vision to grow India’s space economy by fivefold in the next decade demonstrates the government’s strong commitment to this sector. We previously advocated for increased financial incentives to support the burgeoning space startups in the country.”

“The announcement of a ₹1000 crore VC fund is a step forward, addressing the funding challenges faced by these nascent ventures in this capital-intensive domain. Additionally, the proposal for establishment of 12 industrial parks across India we hope will include the space sector as this will provide a substantial boost to the space and satellite manufacturing industry, which has long called for the creation of space parks. These measures are pivotal for the growth and development of India’s space ecosystem,” he added

New Space India Limited (NSIL) has already demonstrated its prowess in the global commercial launch services market. The successful execution of contracts to launch 72 satellites for OneWeb into Low Earth Orbit through LVM3 missions has established LVM3 as a reliable launch vehicle. This achievement highlights India’s growing prominence in the international space arena.

The Indian National Space Promotion and Authorisation Centre (IN-SPACe) has also played a pivotal role in promoting and authorizing space activities. As of January 1, IN-SPACe received 440 applications from over 300 Indian entities. These applications cover a range of activities, including authorization, handholding, facility support and consultancy, technology transfer, and facility usage.

Additionally, 51 Memorandums of Understanding (MoUs) and 34 joint project implementation plans have been signed with various non-governmental entities. These agreements aim to extend the necessary support for carrying out space activities, further bolstering the collaborative efforts between the government and private sector.

The Budget 2024 allocation for space technology reflects the government’s commitment to advancing India’s space capabilities and fostering innovation in the aerospace sector. With the support of this funding, the Indian aerospace industry is poised for significant growth, positioning the country as a key player in the global space economy. This strategic investment will not only drive technological advancements but also create new opportunities for startups and private enterprises, contributing to India’s economic and technological development.