Govt exploring the possibility of setting up dedicated space parks

Move may be key to achieving Centre's goal of $11 billion space-related export by 2033

The central government is again looking into the feasibility of setting up dedicated industrial areas for the subsidised manufacturing and development of space technology, two years after the proposal was raised in inter-ministerial meetings.

 

The Department of Telecommunications (DoT) and Ministry of Electronics and Information Technology (MEITY) has received industry representation on it, officials said.

 

The government is keen to ramp up the local manufacturing of indigenously designed satellite components, launch vehicles, and geospatial navigation and monitoring systems.

 

While a Production Linked Incentive scheme (PLI)-like scheme is not envisaged at the moment, other plans are being examined, officials clarified.

 

“There have been recommendations seeking tax benefits in line with those provided in Special Economic Zones. But tying production to exports may not be possible at this stage given that most companies across verticals are startups. Instead, earmarked areas with plug and play infrastructure and sustained government handholding is being explored,” a senior DoT official said. The proposal may also make its way into the next national budget, he added.

 

The primary verticals within space tech include satellite communications, earth observation, positioning and navigation, ground segment, launch vehicles, geospatial satellite services, and aerospace defence manufacturing, among others. Over the past few years, the Prime Minister’s Office and Niti Aayog have highlighted the importance of setting up domestic manufacturing driven value chains for many of these.

 

“Creating a policy for expanding aerospace manufacturing is also being discussed. Large anchor investments by defence and aviation entities in such parks can create the ecosystem necessary for startups to also flourish,” another official said.

 

There are 250 startups currently operating across various segments of the space economy in India. In October, the Cabinet approved the setting up of a Rs 1000 crore Venture Capital Fund dedicated to the space sector, under the aegis of IN-SPACe. Set to run over the next 5 years, it is expected to support 40 startups by infusing strategic capital, and retaining space companies domiciled in India.

 

Creating dedicated space parks had been a key suggestion of the Indian Space Association (ISpA), the apex industry body for space and satellite companies. It has sought extending the government's GST exemption on satellite launch services to critical components of satellites, ground systems, and launch vehicles. 

 

                        Up and up

 

The global space economy is expected to reach $1.8 trillion by 2035, up from $630 billion in 2023 -- almost twice the rate of global GDP growth, according to the World Economic Forum.

 

The Indian space economy is valued at approximately $8.4 billion, making up 2 per cent share of the global space market. The Centre envisions scaling this to $44 billion by 2033, including $11 billion in exports amounting to 7-8 per cent of the global share. Export in the space segment is currently minuscule.

 

There has been little precedent for setting up similar space tech based parks in India. In 2022, Ananth Technologies launched India’s largest private spacecraft manufacturing facility in Bengaluru. It is a 15,000 sqm facility containing four independent modules. The facility is located at the Aerospace Park of the Karnataka Industrial Areas Development Board.

 

While the initial push for establishing space parks had come from the states, there has been limited success so far. Among public private partnership projects, Kerala had announced in 2019 the setting up of a park in Thiruvananthapuram, but little work has progressed on the ground. The state is yet to issue the tender for construction.

 

Home to the Satish Dhawan Space centre in Sriharikota, Andhra Pradesh has also sought to establish aerospace parks in the state.