Major Financial Boost for India’s Space Startups
The Rs 1,000 crore funding scheme for space startups with help the sector grow in India in coming years, a senior minister in the Prime Minister Narendra Modi government Monday said.
This substantial financial allocation represents a significant commitment from the government toward developing India’s emerging space economy. The funding scheme is expected to catalyze growth within the space startup ecosystem, providing much-needed capital for innovative companies looking to make their mark in this highly specialized sector.
The announcement underscores the government’s recognition of the space industry’s strategic importance and its potential to contribute to India’s technological advancement and economic growth in the coming years.
The biggest testimony testimony of the government has been its work. Even in the first 100 days of the Prime Minister Narendra Modi 3.0 government, we had Rs 1,000 crore allocated for the space startups,” Jitendra Singh, Minister of State (independent charge) for Science & Technology, Department of Atomic Energy, Department of Space, and Minister of State in the Prime Minister Office, said at the eighth edition of the ET Telecom 5G Congress 2025.
Minister Jitendra Singh highlighted the allocation as evidence of the government’s commitment to action rather than mere promises. By prioritizing space sector funding within the first 100 days of Prime Minister Modi’s third term, the administration has demonstrated its intent to accelerate development in this high-potential domain.
The statement was made during the prestigious ET Telecom 5G Congress 2025, providing a fitting platform to announce this major initiative that sits at the intersection of advanced technology and economic development.
Event Details and Fund Management
ET Telecom, a telecom and technology-focused vertical of The Economic Times organised day-long conference with support from the Department of Telecommunications and London-based GSMA in the national capital.
The announcement came during a significant industry event focused on telecommunications and technology advancements. This day-long conference, organized by ET Telecom, a specialized vertical of The Economic Times, brought together key stakeholders from across the technology ecosystem.
The conference’s association with the Department of Telecommunications and the globally recognized GSMA highlights the caliber of the event and its importance within India’s technology landscape.
The Rs 10,000 crore corpus will be managed by SIDBI Venture Capital Limited, which aims to support space technology startups in scaling up and becoming globally competitive while addressing the challenge of risk capital.
The fund will be administered by SIDBI Venture Capital Limited, an organization with extensive experience in managing venture investments in technology-driven sectors. This strategic choice of fund manager ensures that the capital will be deployed with a deep understanding of both financial requirements and the technical challenges faced by space startups.
The primary objectives of the fund are two-fold: helping domestic space technology startups scale their operations to achieve global competitiveness, and addressing the critical gap in risk capital that has historically constrained growth in this sector. By providing this specialized financial support, the government aims to remove one of the key barriers to innovation in India’s space industry.
Deployment Timeline and Strategy
The fund will deploy the amount over a period of five years, with Rs 150 crore deployment earmarked for 2025-26 financial year, followed by Rs 250 crore each in the next three financial years, and Rs 100 crore in 2029-30.
The government has outlined a structured timeline for the deployment of this substantial funding. Beginning with an initial allocation of Rs 150 crore for the 2025-26 financial year, the fund will increase its investment pace in subsequent years. The middle period of the fund’s operation will see the highest annual deployments, with Rs 250 crore allocated for each of the following three financial years.
The deployment schedule concludes with a Rs 100 crore allocation in the 2029-30 financial year, completing the five-year investment cycle. This phased approach allows for calibrated growth of the space startup ecosystem, providing sustained support rather than a single infusion that might be difficult for the emerging sector to absorb effectively.
India’s Progress in the Space Sector
Singh said despite India being a late entrant into the space sector, the country today has taken a lead today.
Minister Singh acknowledged India’s relatively recent entry into the global space arena compared to more established space powers. Despite this delayed start, he proudly noted that India has successfully positioned itself as a leader in certain aspects of space technology and exploration.
This rapid advancement reflects both the quality of India’s scientific and engineering talent and the effectiveness of government policies designed to accelerate development in this strategic sector.
“For the Department of Space, the budgetary allocation has increased from Rs 5,615 crore to Rs 13,416 crore, which is 138% more. This is only the contribution of the government. The pool is much larger because we have opened up the space sector,” he said.
The minister highlighted the dramatic increase in budgetary allocation for the Department of Space, which has risen from Rs 5,615 crore to Rs 13,416 crore, representing a substantial 138% increase. This significant budgetary expansion demonstrates the government’s growing commitment to space exploration and technology development.
Singh also emphasized that the government’s direct financial contribution represents only a portion of the total investment flowing into India’s space sector. By opening the space sector to private participation, the government has created conditions for a much larger pool of capital to enter the industry, combining public and private resources to accelerate growth and innovation.
Policy Framework Supporting Space Sector Growth
The Indian Space Policy, approved in April 2023, aims to boost the Indian space economy by encouraging private-sector participation, focusing on research and development activities and providing access to public-sector infrastructure and expertise.
The funding announcement builds upon the foundation laid by the Indian Space Policy, which was approved in April 2023. This policy serves as the regulatory and strategic framework guiding the development of India’s space sector.
Key elements of the policy include promoting private sector involvement in space activities, emphasizing research and development to push technological boundaries, and creating pathways for private companies to access the valuable infrastructure and expertise that has been developed within public sector space organizations.
By combining this comprehensive policy framework with substantial financial support, the government has created a supportive ecosystem for space startups to flourish, potentially transforming India into a major global hub for space technology and services in the coming years.
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