Budgetary Trend and Scale of Spending
- India’s national space budget has grown 182% since 2012–13, with major expansion before 2019.
- Growth slowed during the pandemic years, as missions were delayed and expenditures capped.
- The 2026–27 Budget Estimate exceeds the pre-pandemic peak by 5.3%, signalling recovery.
- Including NewSpace India Limited (NSIL) internal resources, total ecosystem spending approaches ₹15,000 crore.
- Budget prioritises ISRO operational funding and administrative support for IN-SPACe.
Government Approach and Policy Orientation
- The fiscal roadmap reflects a state-led stabilisation model, rather than industry facilitation.
- IN-SPACe remains a regulatory and supervisory body, with limited financial empowerment.
- Industry bodies sought a transition from direct state funding to market-enabling mechanisms.
- The Budget did not introduce sector-specific industrial incentives for private manufacturers.
Key Industry Demands and Budget Gaps
- PLI scheme for space-grade components was requested to lower domestic manufacturing costs.
- Associations proposed GST rationalisation for satellite launches to reduce entry barriers.
- Both demands were absent from the 2026–27 Budget proposals.
- The sector lacks a dedicated space development fund beyond IN-SPACe’s administrative allocation.
Financing and Infrastructure Challenges
- Industry sought ‘critical infrastructure’ status for launch pads, ground stations, and telemetry networks.
- Such classification could reduce borrowing costs by 2–3% for capital-intensive projects.
- Without it, firms borrow at commercial rates of 10–12%, raising viability risks.
- India holds 3% of the global space market, targeting 10% by 2030.
‘Death Valley’ and Innovation Constraints
- Companies face a gap between R&D investment and first commercial revenues.
- Industry requested five-year tax holidays and R&D tax credits to reduce early-stage risk.
- Existing ₹1,000 crore Venture Capital fund supports equity, not structural fiscal barriers.
- GST input tax non-refunds create a hidden 18% manufacturing cost burden.
Implications for Private Sector Growth
- Private firms risk remaining secondary suppliers to ISRO designs, limiting independent innovation.
- High capital costs may deter deep-tech ventures and intellectual property development.
- Budget ensures public mission continuity, but stops short of enabling a viable private space market.