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'The scrapping of import duty would help Indian companies compete in international markets, thus paving the way for India becoming a space manufacturing hub for the world.'
India's private space sector seems to be floating on cloud nine as seen from their reactions to Finance Minister Nirmala Sitharaman's proposals in her eighth Budget.
The finance minister scrapped duties on imports of components for making satellites, rockets, highlighted the government's focus on the geospatial sector, research and development and the thrust for the manufacturing sector including micro, small and medium enterprises (MSMEs).
The Department of Space also secured a marginal increase in the budgetary allocations for fiscal 2025-2026.
For the space sector, the items that go into the building of rockets and satellites has been brought down to zero from five percent.
The customs duty on ground installation for satellites including its spares and consumables has been brought to zero with effect from 2025-2026.
There are two private rocket makers and a handful of satellite makers in India.
"The scrapping of import duty would help Indian companies compete in international markets, thus paving the way for India becoming a space manufacturing hub for the world," Dr Subba Rao Pavuluri, President, SIA-India, remarked.
The government, Sitharaman said, will launch a National Geospatial Mission to develop foundational geospatial infrastructure and data.
'Using PM Gati Shakti this Mission will facilitate modernisation of land records, urban planning, and design of infrastructure projects,' Sitharaman said.
"The government's Rs 20,000 crore investment to drive private sector-led research and innovation, along with the creation of a deep tech dund, marks a pivotal moment for India's space sector," Dr Pavuluri said.
"These initiatives, alongside the PM Research Fellowship Scheme offering 10,000 fellowships over 5 years, will fuel the next wave of technological advancements, including in space technologies," he added.
"The expansion of broadband connectivity to rural schools and health centres under the BharatNet initiative is a significant leap forward for the space sector," Anil Prakash, director-general, SIA-India, said.
"As we advocated in our pre-Budget memorandum, satellite communications will play a crucial role in bridging the digital divide, particularly in underserved regions. Additionally, the National Geospatial Mission will develop foundational geospatial infrastructure and data which will further enhance the utility of satellite technology for public and national development," Prakash added.
According to SIA-India, the Budget boosts startups with an additional Rs 10,000 crore (Rs 100 billion) and launches an export promotion mission with sectoral targets.
The Budget also proposes a Startup India Innovation Challenge, offering competitive grants to startups in deep tech, space technology, and AI-driven solutions, SIA-India said.
"The announcement of the National Geospatial Mission shows the growing commitment of the government to use the downstream capabilities of the space tech sector," said Lieutenant General A K Bhatt, director general, Indian Space Association.
Citing the ISpA-NASSCOM-Deloitte report General Bhatt said the market for downstream space technology is expected to touch about $610 billion by 2031.
The proposal about New Fund of Funds for startups, setting up of 50,000 Atal Tinkering Labs, an enhanced credit guarantee scheme for startups and the DeepTech fund of funds will give further push to the growing startup ecosystem including space startups which are at a nascent stage, General Bhatt added.
"Users in the government, private sector, and industry have lived with the lack of good foundational data for a very long time," said Agendra Kumar, managing director, Esri India. "I believe this announcement will provide the necessary resources to create geospatial data that will serve as a foundation for social and economic development."
As for the budgetary allocation for the Department of Space for 2025-2026, a sum of Rs 13,416.20 crore (Rs 134.16 billion) has been allocated as gleaned from the Budget papers, up from Rs 11,725.75 crore (Rs 117.25 billion) in 2024-2025.
Venkatachari Jagannathan can be reached at venkatacharijagannathan@gmail.com