Space sector seeks PLI scheme, tax holidays, satellite data in Union Budget

The space sector has put forward its demand ahead of the Union Budget for 2025-26 on February 1

New Delhi: India’s space sector wants the government to spend more on space-based services, slash taxes to spur growth of start-ups and introduce a production-linked incentive scheme for them in the Union Budget.

The sector has put forward its demand ahead of the Union Budget for 2025-26 on February 1. The Indian space economy is valued at 8.4 billion dollars and the private sector has just about started making a mark by building satellites and launch systems eyeing a manifold increase over the next decade.

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“Probably something like a production-linked incentive scheme for the space sector would be helpful from a budget standpoint. A lot of infrastructure development needs to be done for space as well. So, if it can be incentivised for companies to set local manufacturing, that would be great,” Pixxel Space co-founder and Chief Executive Officer Awais Ahmed said.

The Indian Space Association (ISpA) Director General Lt Gen AK Bhatt (retd) demanded import exemptions, lower GST, and tax holidays for the industry for a certain period of time.

He said the ISpA also expected the government to allocate more budget for various departments for space-based applications and cited the example of the Ministry of Road Transport which plans to use satellite data for collection of toll on highways.

“In general we would be looking at a lot of money coming for science and space missions,” Kshitij Gokul, co-founder and Chief Technology Officer of Pixxel Space, said.

Bhatt said the government has approved a 52-satellite constellation for the Defence sector of which 31 satellites will be built by the private sector.

Satcom Industry Association (SIA-India) has demanded a substantial increase to the space budget, up to Rs 40,000-50,000 crore to help bridge the funding gap with nations such as Japan and China.

“This budget increase should prioritise key areas such as advanced satellite technologies, space mining, advanced space safety technologies, enhanced cyber capabilities for space security, space debris management, strategic space initiatives like green propulsion systems, reusable launch technologies, and quantum satellite communication technologies,” Subbarao Pavuluri, president of SIA-India, said.

SIA-India also made a strong pitch for the establishment of a Space Economy Task Force within the Finance Ministry to ensure financial alignment with the 30-year growth plan and create fiscal incentives, including tax holidays and R&D subsidies, to boost growth.

“The export of Indian satellites and launch services should be incentivised with strategic bilateral agreements and tax credits,” Anil Prakash, Director General, SIA-India said.

“We also propose the development of a comprehensive space cyber security framework, supported by a dedicated fund, drawing inspiration from international standards. This framework would encompass the  development of real-time threat intelligence platforms and funding for R&D in space cyber security technologies,” Prakash said.