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Budget 2026: Space industry seeks assured government demand, infra status
Budget 2026: India's emerging private space sector is urging the government to classify space assets as critical infrastructure. This move aims to unlock crucial funding and encourage procurement of domestic products and services. Industry leaders believe this will boost growth and position India as a global space powerhouse.
New Delhi: Ahead of the Union Budget, India's nascent private space industry wants the government to classify space assets as critical infrastructure and allocate funds to procure products and services offered by domestic companies.
"Being a big anchor customer, I think government support has to be around," Awais Ahmed, founder and CEO at Pixxel Space, told PTI.
The government has taken good steps by introducing a research, development and innovation fund, and the deep-tech fund, and wants money to start flowing into the capex-heavy businesses having the potential to make India a powerhouse in space and AI sectors, he said.
Also read: Budget 2026: India's space sector seeks triple budget boost and a satellite mission for remote regions
The Indian Space Association (ISpA) and consultancy firm Deloitte have recommended that the government recognise space assets as critical infrastructure to allow low-cost, long-term financing for the sector.
"Recognising space infrastructure as a distinct infrastructure sub-sector is essential to unlock scale, private investment, and global competitiveness," ISpA, which represents the space sector industry, said.
Indian private players now possess proven capabilities across satellites, launch systems, EO data, and ground infrastructure, but a lack of assured government demand constrains scaling, it said.
"A formal procurement mandate will anchor industry growth while allowing ISRO to focus on strategic and exploratory missions," the space industry body said.
ISpA pointed out that NASA procures 80 per cent of its systems from the industry, while the European Space Agency (ESA) also follows a 90 per cent industry-led procurement model.
"Recognising space infrastructure as critical infrastructure can unlock low-cost financing, while rationalising taxes and duties on specialised launch components, along with reducing Customs GST and indirect taxes for deep tech, can significantly alleviate cost pressures," Srinath Ravichandran, founder and CEO at Agnikul Cosmos, told PTI.
Equally important will be deeper, outcome-driven collaboration with ISRO and IN-SPACe, coupled with clearer long-term procurement, said Ravichandran, whose Agnikul Cosmos plans the maiden orbital flight of its launch vehicle Agnibaan to place small satellites in the low Earth orbit.
"Targeted fiscal incentives for indigenous satellite manufacturing and payload development, alongside expanded government-backed funding pools for deep-tech and space missions, can significantly de-risk early deployments," Suyash Singh, co-founder and CEO at GalaxEye, said.
Singh said clarity on long-term procurement policies, especially for defence and strategic geospatial applications, will be critical in enabling startups to plan mission-ready platforms with confidence.
GalaxEye aims to launch Mission Drishti - a multi-sensor satellite that would enable all-weather Earth-imaging by integrating data acquired from optical and radar sensors.
"Additionally, policy support for downstream commercialisation of satellite data through standardised access frameworks and incentives for data adoption can unlock wider economic value while strengthening India's strategic and climate-monitoring capabilities," Singh said.
ISpA and Deloitte said space infrastructure underpins telecommunications, defence, navigation, finance, weather forecasting, disaster management and governance.
They said a formal recognition will enable infrastructure-grade financing, reduce the cost of capital by 2-3 per cent, and strengthen national resilience.
ISpA also suggested that all ministries, state governments and ULBs procure satellite imagery and geospatial data only from empanelled Indian companies.
It suggested establishing a geo-tagging framework for all space entities and authorised users; restricting access to sensitive satellite data to geo-tagged, authorised entities, ensuring data security and regulatory compliance.
Krishanu Acharya, Co-Founder and CEO, Suhora Technologies, expects targeted measures to accelerate the downstream space economy, particularly in converting satellite data into actionable insights for defence, agriculture, disaster management and climate resilience.
"With increasing adoption and demand for geospatial intelligence among the government and defence agencies, we also want to propose a specialised fund for skilling talent pipelines and academia on priority use cases," Acharya said.
He also expects the Budget to significantly increase defence sector allocations for satellite data analytics, powering ISR, terrain surveillance and maritime domain awareness, driving greater integration of Made-in-India private solutions into defence operations for strategic superiority.
India's space industry has also submitted detailed budget expectations to the Finance Ministry ahead of Budget 2026, urging a threefold increase in public funding for the sector. The Satcom Industry Association of India (SIA-India) has proposed raising space allocations to 0.12 per cent of GDP from the current levels to better support national priorities like secure communications, navigation, climate systems, launch infrastructure and disaster resilience. Alongside higher funding, the industry has pitched a National Satellite Connectivity Mission, backed by public funds, to extend digital services to remote, disaster-prone and commercially unviable regions by subsidising satellite backhaul and ensuring multi-year commitments for steady connectivity.
Also read: Space sector eyes further investment growth in 2026 after record year
India's space industry has also submitted detailed budget expectations to the Finance Ministry ahead of Budget 2026, urging a threefold increase in public funding for the sector. The Satcom Industry Association of India (SIA-India) has proposed raising space allocations to 0.12 per cent of GDP from the current levels to better support national priorities like secure communications, navigation, climate systems, launch infrastructure and disaster resilience.
Alongside higher funding, the industry has pitched a National Satellite Connectivity Mission, backed by public funds, to extend digital services to remote, disaster-prone and commercially unviable regions by subsidising satellite backhaul and ensuring multi-year commitments for steady connectivity.
The proposals also outline structural reforms aimed at boosting competitiveness and investment in deep-tech space capabilities. These include frameworks to ease foreign direct investment, streamlined customs exemptions for space hardware, and hybrid production-linked incentive schemes tailored to long-cycle, low-volume manufacturing in satellites and launch systems.
Industry representatives argue that such measures, coupled with expanded financing, could accelerate India's strategic ambitions in the Indo-Pacific while addressing crucial connectivity gaps in underserved areas. With inputs from PTI
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Source: EconomicTimes
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