Budget 2025: Space Sector Seeks PLI, Tax Relief, and Boosted Funding

India’s space sector has outlined its expectations for the Union Budget 2025-26, set to be announced on February 1, 2025. Industry leaders are calling for government support through tax reforms, incentives, and increased funding to boost innovation and growth.

Production-Linked Incentive (PLI) Scheme for Space Startups

The space industry is urging the government to introduce a PLI scheme to encourage local manufacturing and infrastructure development. Awais Ahmed, CEO of Pixxel Space, emphasised the importance of incentivising companies to establish production facilities for satellites and space technologies.

Tax Cuts and Import Exemptions

The Indian Space Association (ISpA) has requested tax holidays, import duty exemptions, and lower GST rates to support the private space sector. Lt Gen A K Bhatt (retd), Director General of ISpA, highlighted the need for fiscal relief to encourage private sector participation.

Increased Budget Allocation for Space-Based Applications

The sector is pushing for higher budgetary allocations for departments using space applications. For instance, the Ministry of Road Transport aims to leverage satellite data for toll collection. Experts are also hoping for significant funding to support science and space missions.

Focus on Defence and Strategic Space Initiatives

The government has approved a 52-satellite constellation for the defence sector, with 31 satellites to be built by private companies. The Satcom Industry Association (SIA-India) has called for a budget increase to ₹40,000-50,000 crore to bridge funding gaps with nations like Japan and China.

Priority Areas for Development

SIA-India President Subbarao Pavuluri emphasised the need for funding in key areas such as:

• Advanced satellite technologies
• Space mining
• Cybersecurity for space systems
• Reusable launch technologies
• Quantum satellite communication
• Green propulsion systems

Export Incentives and Strategic Agreements

To boost global competitiveness, SIA-India has suggested strategic bilateral agreements, tax credits, and export incentives for Indian satellites and launch services.

Space Cybersecurity Framework

SIA-India has proposed the creation of a dedicated space cybersecurity framework, supported by real-time threat intelligence platforms and R&D funding. This framework would align with global standards to ensure space system security.

Space Economy Task Force

The establishment of a Space Economy Task Force within the Finance Ministry is another key demand. This body would align fiscal policies with a 30-year growth plan and introduce measures like R&D subsidies to accelerate sector growth.

India’s space industry sees Budget 2025 as a critical opportunity to secure the resources and incentives needed to establish itself as a global leader in space exploration and technology.

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