In last couple of years, space technology industry in India has gone through a phenomenal transformation, becoming one of the largest startup hubs globally.
This flourishing Indian space industry is revolutionizing nation’s technological landscape as well as serving as an important catalyst for driving economic growth and sustainable employment rate. Since the beginning of 21st century, India has witnessed a rapid growth in its space startup ecosystem. With the cabinet’s approval of Rs 1,000 crore venture capital fund for space startups in India, it is expected to grow more. In this article, we will discuss about key insights, current trends and future outlook of Indian space sector.
#Cabinet approves establishment of ₹ 1,000 crore #VentureCapitalFund for Space Sector under aegis of IN-SPACe
— PIB India (@PIB_India) October 24, 2024
The indicative range of investment is proposed to be ₹ 10-₹ 60 Crore, contingent upon the stage of the company, its growth trajectory, and its potential impact on… pic.twitter.com/aXhT2NI98P
Credit - X/@PIB_India
The Union Cabinet, headed by Prime Minister Narendra Modi, has allowed establishing a Rs 1,000 crore venture capital (VC) fund for space startups under the supervision of Indian National Space Promotion and Authorization Centre (IN-SPACe), which is a single-window autonomous government agency under the Department of Space (DoS). According to the Cabinet press release on Thursday, “The deployment is planned for up to five years from the actual date of the start of the fund operations. The fund is expected to be operational from FY26”.
Average Annual Investment: The average annual investment is estimated to be Rs 150-250 crore, starting in FY26. This will depend on the investment opportunities and further fund requirements. During FY27-29, it is estimated to reach Rs 250 crore annually. For FY30, the estimated investment would be Rs 100 crore.
Ticket Size Per Startup: The average ticket size for each startup would be in the range of Rs 10- 60 crore. This will depend on the company’s performance, growth trajectory, and “its potential impact on national space capabilities,” as mentioned in the Cabinet statement.
For any growth-stage startup, Rs 10–30 crore funding will be allocated, while late growth-stage ventures will receive Rs 30-60 crore of government funding.
Over the years, ISRO has mastered in executing low-budget space mission. ISRO has spent approximately 600 crores behind successful Chandrayaan-3 mission, which is much lower compared to lunar mission by other countries. This was accomplished by in-house research, and developing indigenous technologies. ISRO generates a good amount of revenue via its commercial arm named Antrix Corporation. It also provides satellite launch services globally, that help them generating substantial cost for further research and development.
In last 10 years, Space Start-Ups have gone from 1 to 189 which led to increased funding, nearly $ 124.7 Million in 2023. According to Tracxn’s Space Tech Geo Report 2024: “Indian space startups had received $126 million in funding in 2023, up by 7 per cent from $118 million secured in 2022”.
Startups generate novel ideas along with creating more jobs, which translates into increased career opportunities, building a robust economy. With space tourism, which has a potential to grow into a lucrative industry, India's space missions are also opening the doors for future resource utilization, driving economic growth.
Union Minister Jitendra Singh mentioned the importance of private sectors: “The role of the private sector will be prime to achieve the expected economy figure. It is expected that private sector will take up independently end to end solution in satellite manufacturing, launch vehicle manufacturing, provide satellite services, and manufacture ground systems.”
This huge investment could potentially generate jobs in engineering, software development, data analysis, manufacturing, supply chains, logistics, as well as professional services.
IN-SPACe has predicted: “India’s space economy has the potential to reach ₹35,200 crore ($44 billion) by 2033 with about 8% of the global share. At present, the share of the domestic market is ₹6,400 crore ($8.1 billion). The export market share is ₹2,400 crore ($0.3 billion). The aim is to increase the domestic share to ₹26,400 crore ($33 billion), and the export share to ₹88,000 crore ($11 billion).”
Dr. Pawan Goenka, chairman, IN-SPACe said, “Our strategy fosters an era of collaboration between all stakeholders to accelerate growth. ISRO is opening its doors wider than ever to private sector participation, so that together, we can successfully boost the space economy for a resurgent Aatmnirbhar Bharat.”
“The proposed fund is expected to boost employment in the Indian space sector by supporting startups across the entire space supply chain—upstream, midstream, and downstream. It will help businesses scale, invest in R&D, and expand their workforce,” the Cabinet said.
