Union Budget 2025: Space Sector Seeks PLI Scheme, Tax Holidays, and More Satellite Data Use

As India prepares for the 2025-26 Union Budget on February 1, the country’s space sector is calling for increased government spending to support growth in space-based services, help space start-ups, and boost local manufacturing. The Indian space economy, valued at $8.4 billion, has started seeing private sector involvement in satellite building and launch systems, and the sector expects significant growth in the coming decade.

Incentives and Support for Space Start-Ups

The space sector is asking the government to introduce a production-linked incentive (PLI) scheme for space companies. According to Awais Ahmed, CEO and co-founder of Pixxel Space, the industry would benefit from incentives that encourage local manufacturing. These incentives could help develop essential infrastructure, creating a boost for companies involved in satellite and launch system production.

Tax Relief and Import Exemptions

The Indian Space Association (ISpA), led by Director General Lt Gen A K Bhatt (retd), is requesting tax holidays and import exemptions for the space industry to foster growth. Bhatt has also called for reduced Goods and Services Tax (GST) rates for space businesses to make the sector more competitive. Additionally, ISpA hopes for increased funding for space-based applications in other sectors, such as the Ministry of Road Transport, which plans to use satellite data for toll collection on highways.

Increased Space Budget Demand

The Satcom Industry Association (SIA-India) is asking the government to significantly raise the space sector's budget, suggesting an increase to Rs 40,000-50,000 crore. This funding would support key areas like advanced satellite technologies, space safety, space mining, and reusable launch technologies. Subbarao Pavuluri, president of SIA-India, emphasized the importance of expanding the space sector to keep pace with global leaders like Japan and China.

Strategic Initiatives and Export Support

SIA-India also proposed the creation of a Space Economy Task Force within the Finance Ministry to align with India’s long-term growth plans. The organization is advocating for fiscal incentives, including tax holidays and research and development subsidies, to boost the sector. They also suggested incentivizing the export of Indian satellites and launch services through bilateral agreements and tax credits.

Focus on Space Cybersecurity

Another priority for SIA-India is the development of a space cybersecurity framework. The organization suggests creating a dedicated fund to support real-time threat intelligence platforms and research in space cybersecurity technologies, drawing inspiration from global best practices.