The Indian Space Association (ISpA) has presented a set of recommendations for the Union Budget 2025-26 to enhance the financial strength and overall growth of the space sector. As a critical enabler of national security, economic development, and technological progress, the space industry is poised to play a pivotal role in India’s future.
ISpA’s proposals emphasise the need for targeted financial incentives and strategic government support to accelerate the sector’s expansion and solidify India’s position as a global space leader.
The key recommendations by ISpA include:
- Recognition of space sector as critical infrastructure
- Extension of production linked incentive (PLI) to space-grade components
- Expansion of goods and services tax (GST) to launch vehicles, ground systems and critical components of satellites
- Tax exemptions/tax holiday and custom-duty exemptions
- Reduction of tax-rate on interest on foreign borrowings
- Reduction in withholding tax-rates to 2 per cent
- Government commitment to consume and adapt new space sector
- Reasonable spectrum usage charges
Commenting on these recommendations, Lt Gen A.K. Bhatt (Retd.), director general, ISpA, said, “We have witnessed remarkable growth in the Indian space sector over the past few years, particularly since its opening to private players in 2020. The government’s progressive reforms and supportive policies are catalysing the next phase of growth in India’s New Space Age. Notable announcements like the Rs 10 billion VC Fund for space startups in the last budget, have significantly bolstered industry confidence in the government’s commitment to this domain. We expect the VC Fund to become operational in the next 2-3 months with the appointment of the fund manager. In the upcoming budget, we look forward to additional financial incentives from the government to further strengthen India’s space economy and propel this burgeoning industry toward new heights.”
