A venture capital fund has been announced for promoting the growth of private space companies in India.

Can the government do more to encourage the growth of the private space sector in India? (Image Credit: News9).

New Delhi: The Government of India has been taking steps to increase the participation of the private sector in India’s space operations. Right from its inception, ISRO has been working closely with private industry partners to realise its goals. The establishment of the Indian National Space Promotion and Authorisation Centre (IN-SPACe) made it easier for the participation of the private sector in the space domain, with the setting up of a single-window clearing agency for managing all private space activities from India. This was followed up by the founding of the Indian Space Association (ISpA) in 2021, a common forum for private players in the space domain to voice their aspirations.

The roll out of the India Space Policy in 2023 further cemented the role of the private sector in India’s space ambitions, which dramatically expanded in scope after the incredible success of Chandrayaan 3 last year. ISRO now has a roadmap that includes human spaceflight, the assembly of the Indian Space Station, and landing an Indian on the lunar surface using domestic hardware before 2047, and then going on to establish a Moon base. To meet these ambitious goals, ISRO will have to rely on the private space sector.

In her speech today, Finance Minister Nirmala Sitharaman announced a single measure to foster the growth of the private space sector in India, “With our continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of Rs 1,000 crore will be set up.” This VC fund is likely to be mediated by IN-SPACe, which has already embarked on a programme to nurture promising innovative concepts into viable businesses and handhold them into developing a proof-of-concept demonstration and a seed fund scheme for New Space startups operating in the fields of urban development and disaster management. 

Strategic interventions can lift the private sector into higher orbits

There is however, plenty of room to further encourage the growth of the private space sector in India. The most critical need of the hour is to provide a sustainable licensing model for satellite service providers, and provisioning them with the necessary spectrum. There is also a need to comprehensively track the growth of the space sector, and report on the growth transparently, as is done by other advanced spacefaring nations such as the US and UK with an aim at easing investment decisions. Encouraging the domestic value chain, targeted tax cuts, and production-linked incentives can also boost the private space sector. Early enactment of the highly anticipated Space Activities Act can prove beneficial to the domestic ecosystem for providing guardrails to tackle challenges around liabilities, enforcements and standards.

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