Recognise space sector as critical infrastructure, Indian Space Association says in its Budget wish list

Recognising the space sector as critical infrastructure, demand creation through a 50% government procurement mandate, financial and tax incentives are among the recommendations for the space sector in the upcoming Union Budget by the Indian Space Association (ISpA).

“India’s space sector is entering a decisive growth phase yet remains structurally disadvantaged in access to finance due to its capital-intensive nature and long gestation cycles of five to seven years. While global peers classify space assets as strategic or critical infrastructure, India’s space ecosystem currently lacks formal infrastructure status, limiting access to long-term, low-cost capital. Recognising space infrastructure as a distinct infrastructure sub-sector is essential to unlock scale, private investment, and global competitiveness,” the ISpA said on the need to recognise space sector as critical infrastructure.

On procurements

It also recommended that at least 50% of all government procurement for space-based services, hardware, and missions be sourced from the Indian private entities (NGEs).

The ISpA said that all Ministries, State governments, and urban local bodies to procure satellite imagery and geospatial data only from empanelled Indian companies.

“With growing use of satellite-derived data in governance and commercial applications, standardisation and security are critical. A structured procurement and access framework will support domestic industry while safeguarding national interests,” the ISpA said.

Tax incentives

On the financial and tax incentives for the sector, it has recommended the need to introduce Production Linked Incentive schemes for satellites, launch vehicles, space-grade components, and critical subsystems, provision for five-year tax holiday for space manufacturing, launch services, and space-based service providers.

“Enable R&D tax credits of 20% to 30% for qualifying space-sector R&D, introduce capital investment tax credits for launch pads, ground stations, and satellite production plants, allow accelerated depreciation on satellites, rockets, and launch-related hardware,” it said.

SEZs and exports

The Special Economic Zones and export enablement, interest subvention for space infrastructure and R&D, incentives to promote R&D and employment, GST rationalisation and input tax credit reform, international collaboration, exports, and FDI rationalisation, legal and regulatory certainty are the other recommendations by the ISpA.