Space economy receives Rs 1,000 crore venture capital in Union Budget 2024

Union Budget 2024-25: Indian space economy is expected to grow to $44 billion by 2033

Union Finance Minister Nirmala Sitharaman announced the proposal to set up a venture capital fund of Rs 1,000 crore dedicated to the space economy. This announcement, made during the Union Budget presentation for the fiscal year 2024-25 on Tuesday, highlights the government’s commitment to advance the Indian space sector, which gained momentum since the successful Chandrayaan-3 and Aditya L-1 missions last year.

A venture capital fund of Rs 1,000 crore is proposed to support the growth and development of the space economy in India. This fund aims to provide the necessary financial resources to foster innovation and expansion in the sector.

Reacting to the announcement, Anil Joshi, managing partner at Unicorn India Ventures, said, "The Rs 1,000 crore fund of funds for space tech is testimonial to India’s capability in coming up with breakthrough solutions at low cost."

"This will certainly help space tech companies to look for much needed early stage capital to get started. This will certainly help mobilise over Rs 4000 crore, great move," Joshi added.

Bhaskar Majumdar, managing partner at Unicorn India Ventures added that alonside the fund, the government "should look at the Intellectual Property  regime". Majumdar said, "The much overdue Patent Policy needs to come out soonest to enable maximisation of R&D Fund."

Indian space economy to grow to $44 billion by 2033

The Indian space economy is expected to grow from its current $8.4 billion (2-3 per cent of the global space economy) to $44 billion by 2033.
 

The private sector is anticipated to play a crucial role in achieving these growth targets. The sector is expected to independently handle satellite manufacturing, launch vehicle manufacturing, provide satellite services, and manufacture ground systems. The government’s vision includes a significant shift towards private sector-led initiatives to boost the space economy.

The year 2023 saw investment in Indian space start-ups increased to $124.7 million, highlighting growing interest and confidence in the sector following successful space mission by Indian Space Research Organisation (Isro) that brought international attention to India.
 

The Centre aims to increase India’s share of the global space economy five-fold by 2030, reaching 10 per cent from the current 2 per cent. By 2047, the target is to achieve a 15 per cent share in the global space economy, Union Minister of State (Independent Charge) Science & Technology Jitendra Singh said earlier this year.

What did the Economic Survey 2023-24 say about space sector?

The Economic Survey 2023-24, released on Monday, revealed that India currently operates 55 active space assets, including communication satellites, navigation satellites, scientific satellites, meteorological satellites, and Earth Observation satellites. These assets play a crucial role in various applications, from communication to weather forecasting and scientific research.

More than 300 Indian entities have submitted 440 applications to the Indian National Space Promotion and Authorisation Centre (IN-SPACe) as of January 2024, seeking support in various aspects of the space sector.

Meanwhile, non-governmental entities have signed 51 memorandum of understandings (MoU) and 34 joint project implementation plans for space activities.

Indian space economy: Startups and private ventures

The number of space start-ups in India has surged to nearly 200 in 2024, up from just one in 2022, due to the reforms in the space sector.

Private companies such as PixxelSpace, Digantara, Dhruva Space, Azista BST Aerospace, and Tata Advanced Systems Limited have developed satellites and functional payloads for operations in outer space.
 

Among public-private partnerships, Hindustan Aeronautics Ltd and Larsen & Toubro have been selected for the end-to-end production of five Polar Satellite Launch Vehicles (PSLVs). This collaboration aims to enhance India’s capabilities in satellite launch technology.

Additionally, Isro has expanded its launch vehicle fleet, adding the Launch Vehicle Mark-3 and the Small Satellite Launch Vehicle to its existing PSLV and Geosynchronous Satellite Launch Vehicle.