Union Budget 2023 & The Indian Space Tech Ecosystem
The Indian private space tech sector has finally gotten its wings, and the time is ripe to soar higher. When the government opened up the space tech sector for private players, it truly helped fortify our vision for the future. Since then, Pixxel launched India’s first private commercial satellite with Shakuntala, Skyroot launched the first private suborbital rocket, and Agnikul inaugurated their first private launch pad. And these are just a few of the notable achievements.
Just in the last two years, the Centre has poured in over USD 198.22 million of capital and reinstated its faith in private space tech startups. In 2022, we saw USD 108 million+ of private investments within space tech startups. The fact that we’ve managed to raise enough capital to experiment and establish ourselves, develop products for the global market and become space-proven, almost near flawlessly, is a testament to our collective competence.
Space tech dreams today are no more only aspirational, but also achievable. The private space sector has shown an immense track record, and with the right push from the government, we’re more than equipped to go above and beyond.
Key expectations from the 2023 Union budget
With the space tech industry set to grow to USD 13 billion by 2025, we will see more and more ambitious entrepreneurs take on the challenge and become space-proven. In the 2023-24 Union Budget, we’re hoping to see larger dedicated allocations than last year for IN-Space and Defense Space Agency to help with common testing facilities, procurement of new technology, demonstration and setting up the needed infrastructure.
Additionally, the space supply chain is still scattered all over the world, often expensive and with longer wait periods or availability issues. To become independent across all end-to-end functions, we’d like to request the introduction of a space-based Production Linked Incentive Scheme (PLI), similar to the one for electronics, for space tech startups to boost local manufacturing for space components and encourage capability building within the country.
Public-private partnerships liftoff
ISRO has been instrumental in leading the Indian space sector and showing the world our capabilities. In 2022, it made history with the first official public-private collaboration for a space launch when it carried two private satellites on its payload. Pixxel itself was the first company to leverage ISRO’s satellite testing facility for its satellite Anand and launched it via ISRO’s PSLV C54 rocket. Now, further opening up of ISRO’s facilities for testing of private spacecraft will save millions of dollars and months for many startups looking to get to orbit early.
The utilisation of the Sriharikota launch range in Andhra Pradesh by private rocket companies is also a great success story of the public-private partnerships model, where private companies can leverage decades of infra and experience to build on top of and take off, quite literally.
However, there’s still scope for more work on joint civil projects, where the government can work with the private space tech sector to deploy technologies and solutions. Whether that’s working together on the space station with ISRO or building satellites for marine monitoring/forest monitoring/agriculture monitoring in the country in tandem with ministries etc., the opportunities are endless.
Better scope for local and global investments in space technology
Space technologies are going to be critical in establishing India’s geopolitical strength in the coming few years. While the deep space missions will continue to garner eyeballs, the focus will shift towards technologies that can help create a more sustainable and transparent world. We expect satellite manufacturing, ground services, and satellite services to contribute heavily to pushing India’s space revolution, driven by the demand for higher bandwidth and lowest latency data needs.
The future of space tech investment will increasingly depend on the actual demonstration of technologies in space and commercial revenues showing a need for those technologies. Only demonstrated business opportunities with strong moats will continue to raise funding and accelerate their growth.
To weather the current economic downturn across the globe and emerge on the other side with continued investment, enabling an easy FDI process will be key. Additionally, solving access to grants and revenue and contract mechanisms for early-stage startups, and ensuring enough interest and help to attract India-based late-stage and growth-stage investors will help catapult us to the next orbit.
.jpg)
_20240501181242original_image_36.webp)
