In a bold move to boost the nation's space economy, Finance Minister Nirmala Sitharaman announced the establishment of a Rs 1,000 crore venture capital fund on Tuesday. This initiative aims to expand India's space economy fivefold over the next decade. “With our continued emphasis on expanding the space economy, by five times in the next 10 years, a venture capital fund of Rs 1,000 crore will be set up,” Sitharaman stated.
India's current share in the global commercial space market stands at a mere 2%, despite its status as a major spacefaring nation. The government's vision is to increase this share to 10% by 2030. Previously, support for private players in the space sector was limited to policy support, technical assistance, and shared infrastructure. This new venture capital fund marks the first significant financial assistance for the burgeoning sector.
Lt. Gen. AK Bhatt (Retd.), Director General of the Indian Space Association (ISpA), welcomed the announcement. “We previously advocated for increased financial incentives to support the burgeoning space startups in the country. The announcement of a Rs 1,000 crore VC fund is a step forward, addressing the funding challenges faced by these nascent ventures in this capital-intensive domain. These measures are pivotal for the growth and development of India’s space ecosystem,” he said.
While the Indian National Space Promotion and Authorisation Centre (IN-SPACe) offers a seed funding scheme, it is limited and targeted at select projects utilizing space technology to solve human challenges. The space sector was opened to private players in 2020, allowing them to capture the global market while ISRO focused on high-profile missions such as Chandrayaan-3, Aditya-L1, and Gaganyaan.
Industry leaders have lauded the government's initiative. Awais Ahmed, founder and CEO of Bengaluru-based space data company Pixxel, described the announcement as groundbreaking. He underscored the government’s commitment to fostering a dynamic space ecosystem and emphasized the need for larger funds as the sector grows, though he acknowledged this as an excellent start.
Srinath Ravichandran, co-founder and CEO of Chennai-headquartered launch vehicle manufacturer Agnikul Cosmos, noted that the fund would help larger players emerge from India’s space startup ecosystem. Similarly, Pawan Kumar Chandana, co-founder and CEO of Hyderabad-based Skyroot Aerospace, remarked, “By strategically investing in both its established capabilities and promising new technologies, India's private space sector has an opportunity to capture a significant market share of the global space economy over the coming years.”
This significant financial push is poised to transform India's space economy, driving growth and innovation in a sector that holds immense potential for the future.