New Delhi: The Union Cabinet has approved the creation of a Rs.1,000 crore Venture Capital Fund aimed at driving growth in India's space sector. The initiative, which will be managed under the supervision of IN-SPACe, is expected to strengthen private sector participation and enhance the country's space capabilities.
The fund will be rolled out over a period of five years, with annual investments ranging between Rs.150 crore and Rs.250 crore, depending on opportunities within the sector. By the end of the deployment phase, a total of Rs.1,000 crore will have been allocated to support around 40 startups, offering investment support between Rs.10 crore and Rs.60 crore based on the company’s growth stage and development needs.
India's government has positioned the fund as a strategic move to retain emerging space companies within the country, as part of a broader effort to grow the domestic space economy. It aims to provide much-needed financial support for startups at various stages of growth, enabling them to scale their operations, invest in research and development, and contribute to space technology advancements.
The fund also aligns with the government’s ambition to accelerate the expansion of India’s space industry, which is currently valued at $8.4 billion, and boost its contribution to the global market. By 2033, the Indian space sector is projected to grow to $44 billion. The fund is expected to stimulate innovation and foster an ecosystem of space startups, many of which are involved in areas such as satellite manufacturing, data analysis, software development, and logistics.
In addition to promoting innovation, the venture capital fund is seen as a means to create employment across the entire space value chain. This could generate hundreds of direct jobs in engineering, data analysis, and manufacturing, and thousands of indirect jobs in related fields. It will also play a role in supporting Atmanirbhar Bharat by encouraging self-reliance in space technology and reducing dependence on foreign expertise.
The proposal to establish the fund follows the 2020 space sector reforms, which were designed to open up space activities to private sector involvement. IN-SPACe, which was created to oversee and promote this participation, has played a key role in identifying the need for such a fund, particularly in light of the risks associated with financing startups in high-tech industries.
With the Indian space ecosystem now boasting around 250 startups, the fund is seen as a critical measure to provide early-stage equity, encouraging private investment in the space sector. By offering risk capital and government backing, it aims to instill confidence in private investors, support the growth of Indian space companies, and solidify India’s position in the global space economy.
BI Bureau
