Industry experts say the venture fund will give a major boost to new entrepreneurs and non-government entities (NGEs) in the sector
Finance Minister Nirmala Sitharaman said the government plans to expand the space economy five times in the next 10 years during her Union Budget 2024 speech on Tuesday. PTI
In a major boost to the space industry, Finance Minister Nirmala Sitharaman announced on Tuesday that a venture capital (VC) fund of Rs 1,000 crore will be set up to promote space technology.
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Several stakeholders, including the Indian Space Association (ISpA), as well as the heads of the Indian National Space Promotion and Authorisation Centre (IN-SPACe) and Pixxel Space, said the announcement would fuel growth and development in the sector.
“With our continued emphasis on expanding the space economy by five times in the next 10 years, a venture capital fund of Rs 1,000 crore will be set up,” Sitharaman said in the Lok Sabha while presenting the Union Budget 2024.
IN-SPACe chairperson Pawan Goenka said the setting up of a focused venture fund of Rs 1,000 crore in the Union Budget 2024 will give a major boost to new entrepreneurs and non-government entities (NGEs) in the sector. He added that INSPACe is looking forward to supporting the growth of the space economy and nurturing an enabling ecosystem for NGEs.
“The fund announced in the Union Budget 2024, along with the existing policies for the space sector, will fuel technological innovation and create a fertile ground for NGE's to thrive,” Goenka told PTI.
Awais Ahmed, the Chief Executive Officer of Bengaluru-based start-up Pixxel Space, said the VC will provide crucial financial support to innovative startups and companies and enable them to scale their technologies towards contributing to India's space ambitions.
“Such a significant investment underscores the government's commitment to fostering a robust and dynamic space ecosystem,” Ahmed told PTI.
Chennai-based start-up Agnikul Cosmos added that the VC fund will enable larger players to emerge out of India's startup ecosystem.
“Wonderful news for all of us in the sector. This also shows that the government is continuing to strongly back its vision of making India have a larger chunk of the global space economy,” said Agnikul Cosmos CEO Srinath Ravichandran.
The VC fund addresses a crucial funding gap in nascent space research and development and will be transformative in building sovereign capabilities, fostering local IP creation, and driving innovation, stated KaleidEO COO Arpan Sahoo.
According to the Indian Space Association, the move demonstrates the government's commitment to the sector.
“The announcement of a Rs 1,000 crore VC fund is a step forward, addressing the funding challenges faced by these nascent ventures in this capital-intensive domain,” ISpA Director General Lt Gen AK Bhatt (Retd) said.
Experts also believe that the establishment of 12 industrial parks across India will help provide a substantial boost to the space and satellite manufacturing industry which has been demanding the creation of space parks.
“These measures are pivotal for the growth and development of India's space ecosystem,” Bhatt said.
"The announcement of the Rs 1,000 crore venture capital fund in the Union Budget 2024 for the space sector is a commendable initiative that will significantly foster innovation and growth within this critical industry. Every rupee invested promises substantial returns, as the space sector holds immense potential for contributing to GDP growth and enhancing national infrastructure,” said Anil Prakash, director general of the Satcom Industry Association-India.
(With PTI inputs)
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