Reaching for the Stars: Budget 2024-25

The Indian space economy is projected to grow from its current size of USD 8.4 billion (Rs 68,000 crore), which is about 2-3% of the global space market, to USD 44 billion (Rs 352,000 crore) by 2033. Union Finance Minister Nirmala Sitharaman, on Tuesday (July 23), announced that the Centre proposed to set up a venture capital fund of Rs 1,000 crore to boost India’s space economy.

India’s private sector will now take centre stage in the growth of the country’s space economy. Companies will, possibly, take over satellite manufacturing, launch vehicles, satellite services and ground systems. The government aims to encourage private initiatives to strengthen the space economy.

In 2023, investments in Indian space startups rose to $124.7 million, reflecting increased interest and confidence in the sector, especially after successful missions by the Indian Space Research Organisation (ISRO) that gained international attention. By 2047, the goal is for India to capture 15% of the global space market, as stated by Union Minister of State for Science & Technology, Jitendra Singh.

INSIGHTS FROM ECONOMIC SURVEY 2023-’24

The Economic Survey 2023-’24, released on Monday, says India currently is in possession of 55 active space assets. These include communication satellites, navigation satellites, scientific satellites, meteorological satellites and Earth observation satellites. These assets are important for many uses, such as communication, weather forecasting and scientific research.

As of January 2024, over 300 Indian organizations had submitted 440 applications to the Indian National Space Promotion and Authorization Centre (IN-SPACe) for support in different areas of the space sector. Additionally, non-government groups signed 51 memorandums of understanding (MoUs) and 34 plans for joint projects related to space activities.

SPACE ECONOMY: STARTUPS & PVT INITIATIVES

Led by space sector reforms, India’s space startups have skyrocketed, numbering almost 200 in the current year, while, in 2022, it was only one. Such private companies as PixxelSpace, Digantara, Dhruva Space, Azista BST Aerospace and Tata Advanced Systems Limited have created satellites and operational payloads for use in outer space.

In public-private partnerships (PPPs), Hindustan Aeronautics Ltd and Larsen & Toubro have been tasked with handling the complete production of five Polar Satellite Launch Vehicles (PSLVs). This collaboration aims to improve India’s satellite launch technology. Additionally, ISRO has expanded its launch vehicle fleet by adding the Launch Vehicle Mark-3 and the Small Satellite Launch Vehicle to its existing PSLV and Geosynchronous Satellite Launch Vehicle.

BUDGET 2024-’25: ROLE OF VENTURE CAPITAL

Sitharaman’s announcement of a ₹1,000-crore venture capital fund in her Budget 2024-’25 speech is an important step for India’s space economy. This initiative aims to significantly boost the country’s space sector, with a goal of expanding it five times over the next 10 years.

HERE IS AN ANALYSIS OF THIS DEVELOPMENT

1. Boosting Private Sector Participation

Encouraging Innovation: The fund aims to boost research, new ideas and business development in space technology led by the private sector. This initiative fits into the government’s larger plan to establish India as a key player in the global space industry.

Supporting Startups: More than 180 space technology startups recognized by the government will gain from this initiative. These startups have struggled to find funding and this fund is designed to help solve that problem.

2. Economic Growth and Job Creation

Highly Skilled Jobs: The growth of the space economy is expected to generate many highly skilled jobs, which will help boost the overall economy.

Economic Multiplier Effect: Investing in space technology can lead to benefits in such other areas as telecommunications, agriculture and disaster management, creating even more opportunities.

3. Technological Advancements

Cutting-Edge Technologies: The fund will help develop advanced space technologies, improving India’s abilities in satellite services, communication systems and space exploration.

Global Competitiveness: By promoting innovation and technology, India seeks to strengthen its position in the global space market.

4. Infrastructure & Sustainable Development

Infrastructure Expansion: As part of the larger ₹1-lakh crore funding pool, this fund will help build important facilities for space research and development.

Sustainable Development: The initiative also includes plans for sustainable growth, making sure that expansion of the space sector is environmentally friendly.

5. Collaborative Efforts

Government-Private Collaboration: The fund is expected to boost teamwork among government agencies, universities and private companies. This collaboration is essential for successfully carrying out complex space projects.

IN-SPACe and Agreements: IN-SPACe has received over 440 applications for different space activities and signed 51 agreements and 34 joint project plans with private organizations.

6. Strategic Importance

National Security: Improving the space sector is important for national security as it enhances India’s abilities in space-based surveillance and communication.

Global Leadership: This initiative is part of India’s larger goal to become a leader in the global space economy, following recent achievements, such as the Chandrayaan-3 lunar mission.

CONCLUSION

The ₹1,000-crore venture capital fund announced by Sitharaman is a significant move for India’s space economy. By encouraging innovation, supporting startups and promoting technological advancements, this initiative aims to make India a key player in the global space industry.

The fund will have a wide-ranging impact, helping boost economic growth, create jobs and promote sustainable development, while also strengthening India’s strategic capabilities and competitiveness on the world stage.

(The author of this article is a Defence, Aerospace & Political Analyst based in Bengaluru. He is also Director of ADD Engineering Components, India, Pvt. Ltd, a subsidiary of ADD Engineering GmbH, Germany. You can reach him at: girishlinganna@gmail.com)

 Disclaimer: The opinions expressed in this article are solely the author's and do not reflect the opinions of DNA.