The Union Budget 2024 presents a pivotal moment for India’s burgeoning space sector. As Finance Minister Nirmala Sitharaman prepares to announce the budget, the private space industry has outlined a comprehensive wishlist aimed at fostering growth and innovation. This wishlist includes a range of incentives and strategic allocations to bolster the space economy, which is projected to reach $44 billion by 2033.
The Wishlist: Key Demands of the Space Sector
- Import Holidays and GST Exemptions
- Industry leaders are advocating for more import holidays and GST exemptions for components of launch vehicles.
- These measures aim to reduce costs and make India a competitive player in the global space market.
- Productivity-Linked Incentives (PLI)
- To encourage domestic manufacturing, the space sector is requesting productivity-linked incentives.
- These incentives could drive innovation and increase the sector’s contribution to the national economy.
- Government Expenditure on Space-Related Acquisitions
- Increased government spending on space-related acquisitions is crucial for growth.
- This could involve procurement of satellites and other space technologies for various governance applications.
Strategic Allocations: Supporting a Nascent Industry
- Government as an Anchor Customer
- The Indian Space Association (ISpA) and Satcom Industry Association (SIA-India) stress the importance of the government acting as an anchor customer.
- This support would provide a stable revenue stream for private space companies.
- Adoption of Space Technology Solutions
- Lt Gen Anil K Bhatt (retd), Director General of ISpA, advocates for the adoption of space technology solutions in agriculture, disaster management, infrastructure planning, urban development, and remote connectivity.
- This would not only improve governance but also drive demand for space technologies.
- GST Waivers on Critical Components
- Extending GST waivers from satellite launch services to other critical components is another key demand.
- This would alleviate financial burdens and foster innovation in the space sector.
- Tax Exemptions and Custom-Duty Waivers
- Tax exemptions and custom-duty waivers for space sector firms are essential for growth.
- These incentives could lower operational costs and attract more investments into the industry.
Implementation of the Space Activities Act
- Regulatory Framework
- Prompt implementation of the Space Activities Act is crucial.
- A clear regulatory framework would provide stability and predictability, encouraging investments in the sector.
- Strategic Incentives for Domestic Demand
- Strategic incentives like lower GST rates, tax holidays for startups, reduced import duties on critical components, and low-interest financial loans are vital.
- These measures would stimulate domestic demand and support the growth of space startups.
Integrating Space Manufacturing into Defense Obligations
- Defense Offset Obligations
- Anil Prakash, Director General of SIA-India, suggests integrating space manufacturing into defense offset obligations.
- This would ensure sustained funding and market demand for the space sector.
- Quantitative Analysis of the Space Economy
- Conducting a detailed quantitative analysis of the space economy is recommended.
- This would provide accurate measurement and boost funding for the sector.
Budget Allocations for INSPACe
- Supporting Space Startups
- Pawan Kumar Chandana, co-founder and CEO of Skyroot Aerospace, highlights the need for increased budget allocations for the Indian National Space Promotion and Authorisation Centre (INSPACe).
- This would support the growing number of space startups and drive innovation.
- Ambitious Missions
- Increased budget allocations for ISRO’s ambitious missions, like Gaganyaan, are essential.
- This would enhance India’s position in the global space economy.
As India stands on the brink of a new space age, driven by private spaceflight companies, satellite providers, and space-enabled services, the Union Budget 2024 is a critical opportunity. The comprehensive wishlist from the space industry reflects a strategic vision to position India as a leader in the global space economy. Meeting these demands could pave the way for sustained growth and innovation in the sector.
