The government will set up a Rs 1,000 crore venture capital fund to promote space technology, Finance Minister Nirmala Sitharaman announced on Tuesday, in an announcement that was warmly welcomed by the industry.
Several officials, including heads of the Indian Space Association (ISpA), Indian National Space Propulsion and Authorisation Centre (IN-SPACe) and Pixel Space, said the provisions announced in Budget 2024-25 will boost growth and development in the sector.
“Our focus remains on expanding the space economy five times over the next decade and a venture capital fund of Rs 1,000 crore will be set up,” Sitharaman said while presenting the Union Budget in the Lower House of India.
According to Pawan Goenka, Chairman, IN-SPACe, the announcement of a Rs 1,000 crore focused venture fund will provide impetus to new entrepreneurs and Non-Governmental Organisations (NGEs) in the space sector.
He said INSPACe looks forward to supporting the growth of the space economy and fostering the ecosystem that enables NGE.
“This fund, coupled with existing policies in the space sector, will foster innovation and create fertile ground for NGEs to flourish,” Goenka told PTI.
Awais Ahmed, CEO of Bengaluru-based startup Pixel Space, said the venture capital fund will provide crucial financial backing to innovative startups and companies, enabling them to scale their technology and contribute to India’s space ambitions.
“Such a major investment underlines the government’s commitment to foster a strong and dynamic space ecosystem,” Ahmed told PTI.
Chennai-based startup Agnikul Cosmos added that the venture capital fund will help larger companies emerge from India’s startup ecosystem.
“This is great news for all of us in the sector. It also demonstrates the government’s continued strong support for the vision of India having a larger share in the global space economy,” Agnikul Cosmos CEO Srinath Ravichandran said.
According to Arpan Sahoo, COO of KaleidEO, the VC fund addresses a critical funding gap in early space research and development and the effort will be transformative in building sovereign capacity, fostering local IP creation and driving innovation.
Industry body the Indian Space Society said the move demonstrates the government’s commitment to the space sector.
“The announcement of the Rs 1,000-crore venture capital fund is a step towards addressing the funding challenges faced by start-ups in this capital-intensive sector,” said Lt. Gen. A. K. Bhatt (retd), Director General, ISpiA.
The setting up of 12 industrial parks across India will also provide a major boost to the space and satellite manufacturing industry, which has been clamoring for a space park for many years.
“These steps are crucial for the growth and development of India’s space ecosystem,” Bhatt said.
“The announcement of a Venture Capital Fund for Space is a laudable initiative to encourage innovation and growth in this important industry. Every rupee invested in the space sector is likely to yield significant returns as it has the potential to contribute to GDP growth and strengthen national infrastructure,” said Anil Prakash, Secretary General, Indian Satellite and Communications Industry Association.
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