India’s space industry is poised for a major boost with the upcoming Union Budget. The success of Chandrayaan-3, which made India the fourth country to land on the moon, and the rise of private space startups have charged the sector.
With ISRO’s ambitious roadmap and increasing global interest in India’s cost-effective space solutions, this Budget could be a defining moment for the sector.
In the previous Budget, finance minister Nirmala Sitharaman announced an impressive allocation of INR 1,000 crore, giving the space technology a boost. “[Something like] this will certainly help space-tech companies looking for the much-needed early-stage capital to get started,” Anil Joshi, managing partner at Unicorn India Ventures, said.
Manoj Agarwal, managing partner at Seafund, said, “As a deep tech-focused VC fund, the FM announcing Rs 1,000 crore space economy VC fund and R&D fund of Rs 1 lakh crore will work as a strong catalyst for startups in deep tech and space tech.”
Over the Past Year…
India has made major progress in its space dreams over the past year. As of last year, the Indian space economy was valued at approximately $8.4 billion, constituting a 2% share of the global space market. The government envisioned scaling the space economy to $44 billion by 2033, including $11 billion in exports amounting to 7-8% of the global share.
India currently operates 56 active space assets, including 19 communication satellites, nine navigation satellites, four scientific satellites, and 24 earth observation satellites. Recently, it launched the GSAT-20 satellite in collaboration with SpaceX.
The Cabinet also approved the Gaganyaan follow-on mission, which will pave the way for the establishment of the first module of the Bhartiya Antariksh Station; the Chandrayaan-4 Lunar Sample Return Mission; the Venus Orbiter Mission; and the development of the Next Generation Launch Vehicle.
At the AWS Summit, Clint Crosier, the director of the AWS Aerospace and Satellite business, called India the next space technology hub. He expressed that AWS sees India as a significant growth market and plans to invest 12.7 billion in cloud infrastructure in India by 2030.
Amidst this, a number of Indian space startups took off, quite literally. These covered a wide range of industries, including Earth observation applications (Pixxel), space-based data analytics (Bellatrix Aerospace), satellite manufacturing (Agnikul Cosmos), and launch vehicle development (Skyroot Aerospace).
The Indian Space Research Organisation (ISRO) saw the appointment of V Narayanan as the new chairman of the organisation and secretary of the Department of Space. He succeeded S Somanath, who retired after a stellar tenure.
ISRO also announced the successful completion of its SpaDeX (Space Docking Experiment) mission, launched on December 30, 2024, from the Satish Dhawan Space Centre in Andhra Pradesh’s Sriharikota. This made India the fourth in the world to achieve space docking alongside the United States, Russia, and China.
This is the same launch pad at which ISRO just completed its 100th launch of the GSLV-F15 / NVS-02 Mission.
#100thLaunch:
— Dr Jitendra Singh (@DrJitendraSingh) January 29, 2025
Congratulations @isro for achieving the landmark milestone of #100thLaunch from #Sriharikota.
It’s a privilege to be associated with the Department of Space at the historic moment of this record feat.
Team #ISRO, you have once again made India proud with… pic.twitter.com/lZp1eV4mmL
Under the SpaDeX mission, many Indian space startups launched payloads and took charge of leading India’s space mission. These included experiments from Mumbai’s Manastu Space Technologies Private Limited, Bengaluru’s Bellatrix Aerospace Pvt Ltd and GalaxEye Space Solutions Private Limited, Andhra Pradesh’s N Space Tech, Hyderabad’s TakeMe2Space, and Ahmedabad’s PierSight Space.
Additionally, on January 15 this year, Pixxel, a Bengaluru-based aerospace startup, launched the first three satellites of its Firefly constellation. These hyperspectral satellites, integrated via Exolaunch and launched aboard SpaceX’s Transporter-12 mission, offer the world’s highest-resolution hyperspectral imaging.
This breakthrough enhances climate monitoring, resource management, and environmental analysis with unprecedented precision.
Here’s AIM’s previous interview with Pixxel:
A Promising Future
Yashas Karanam, co-founder & COO of Bellatrix Aerospace expressed hopes for a PLI scheme to incentivise space tech companies and optimise expenses. He also emphasises the need for government contracts.
“Can industries actually spearhead the whole thing and make the entire constellation themselves? It could be a civilian satellite or a different satellite constellation. These kinds of individual budgets are going to really start companies to think about investing in these sectors,” he told AIM.
Another aspect he predicted might arise is the government becoming a customer for some of the products. This sentiment also resonated with Ankit Anand, founding partner at Riceberg Ventures (which invests in deep tech). He told AIM, “If the government becomes a customer, then every investor will know that this startup is able to really sell this thing at a scale.”
Gaurav Seth, co-founder & CEO at PierSight, highlighted to AIM the need for enhanced tax credits and funding to drive innovation, attract investment, and position India as a global leader in space exploration and satellite technology.
“Currently, companies can claim deductions for R&D under Section 35(2AB) of the Income Tax Act, but a higher deduction (e.g., 150%-200%) should be allowed for space R&D spending to incentivise long-term innovation,” he says.
Ronak Kumar Samantray, founder of TakeMe2Space, is confident that government support for the space sector is not just expected—it’s inevitable.
Reflecting on India’s space policy, he believes it is among the best in the world, allowing private companies to hire talent from across the globe, unlike restrictive policies in countries like the US.
“For me, what’s exciting about the Budget is to figure out that new thing that the government decides to do right,” Samantray told AIM, highlighting his company’s belief that ‘space is for everyone’.
Samantray highlighted that India’s Make in India initiative played a crucial role in enabling space tech advancements. Without the earlier push for manufacturing, sectors like precision engineering and satellite production wouldn’t have the skilled workforce needed today.
For India’s space tech sector, the Budget isn’t just about numbers. It’s about the direction the government sets, and if the past is any indication, space will continue to receive strong momentum, he believes.
Not Just Satellites But Drones as Well
Looking at learning from the past, Mughilan Thiru Ramasamy, co-founder and CEO at Skylark Drones, a startup shaping India’s UAV (Unmanned Aerial Vehicle) ecosystem, shared his insights into the advancement of the drone industry in the upcoming Budget.
With the rapid advancements in aerospace and semiconductors, he believes that drones will see increased Budget allocations. “I think the Drone Didi program will get some budget because they will try to create employment,” he told AIM in an interview.
According to Mughilan, one key area of focus is real-time governance. He points to Telangana’s proactive approach, where the state is already integrating drones into administrative operations.
However, he emphasises that beyond just funding drone technology, the government should focus on demand creation rather than just supply-side incentives. A strategic push to increase industry adoption of drones, whether in agriculture, infrastructure, or surveillance, will drive innovation, job creation, and industry growth.
Ankit Mehta, CEO of ideaForge Technology Limited, expressed particular optimism about the potential launch of a Production-Linked Incentive (PLI) Scheme 2.0 for drones.
“While the reported ₹500 crore outlay is expected to extend beyond manufacturing to include services like drone leasing, Indigenous software development, and counter-drone systems, given the potential of the technology and the industry, we need a much larger scheme amounting to ₹1,000-2,000 crore to unlock this opportunity over at least five years,” he said.
Beyond PLI 2.0, he also stressed the need for a dedicated R&D fund, like Seth, to drive innovation, technological advancements, product development, and exports.
“This Budget has the potential to cement India’s position as a global leader in drone technology, driving long-term growth, creating high-value jobs, and ensuring technological sovereignty,” Mehta said.
For the drone sector, the upcoming Budget isn’t just about subsidies or schemes, it’s about the larger vision. A strong emphasis on demand-driven policies could position India as a global leader in drone technology while fostering sustainable economic growth.
