By Vikrant Rana, Rupin Chopra and Shantam Sharma
On October 25, 2024, the Union Cabinet, led by Prime Minister Narendra Modi, approved an unprecedented Rs. 1,000 crore (USD 119 million) Venture Capital (VC) Fund to bolster India’s space sector. This landmark initiative, under the leadership of the Indian National Space Promotion and Authorization Center (IN-SPACe), demonstrates the government’s commitment to self-reliance and technological leadership in high-tech industries. In line with the Atmanirbhar Bharat mission, the fund will provide necessary capital to space startups, addressing a critical funding gap and positioning India as a significant global player in space technology.
However, the detailed rules and regulations governing the implementation of this fund are still awaited. Once finalized, these guidelines will outline the operational framework for fund allocation and startup selection, ensuring a structured and transparent process.
Objectives and Strategic Vision of the VC Fund
This VC fund aligns closely with India’s 2020 space reforms, which have set ambitious goals for private sector engagement and the growth of the space economy. Key objectives of this Rs. 1,000 crore fund include:
| Objective | Description |
| Capital Infusion | Early-stage financial support to foster confidence in the market, especially vital for high-risk, high-reward space technology ventures. |
| Talent Retention | Stem brain drain by offering attractive funding within India, ensuring that domestic startups can grow without relocating abroad. |
| Five-Fold Expansion of Space Economy | Aim to grow India’s space economy fivefold within a decade, supporting innovation and establishing a vibrant space economy. |
| Technological Advancements | Support advanced tech development for domestic and international markets. |
| Boosting Global Competitiveness | Enable Indian firms to develop unique space solutions, reducing dependency on foreign technologies. |
| Supporting Atmanirbhar Bharat | Invest in indigenous startups to reduce reliance on imports and develop a sustainable domestic space sector. |
| Creating a Vibrant Innovation Ecosystem | Nurture startups to create a continuous cycle of innovation and drive new ideas within the Indian space industry. |
| Driving Economic Growth and Job Creation | Expected to create thousands of direct and indirect jobs, bolstering India’s competitive position in the global space sector. |
The fund is expected to support approximately 40 startups, providing essential capital across different growth stages. These startups will be selected based on their commercialization potential and capacity to contribute to India’s space technology ambitions.
Financial Implications and Deployment Strategy
The Rs. 1,000 crore VC Fund will be allocated over five years, with annual investments ranging between Rs. 150 crore and Rs. 250 crore based on industry needs. The allocation of the fund shall be as follows:
| Financial Year | Planned Deployment (in ₹ Crore) |
| 2025–26 | 150 (USD 17.8 million) |
| 2026–27 | 250 (USD 29.7 million) |
| 2027–28 | 250 (USD 29.7 million) |
| 2028–29 | 250 (USD 29.7 million) |
| 2029–30 | 100 (USD 12 million) |
Funding allocation is also segmented by startup growth stages:
- Growth Stage: For startups in early to mid-development phases, with investments between Rs. 10 crore and Rs. 30 crore.
- Later Growth Stage: For more established companies showing strong growth potential, with investments between Rs. 30 crore and Rs. 60 crore.
Employment and Economic Impact
The VC Fund is designed not only to foster technological advancement but also to enhance India’s workforce and economic stability. As the fund empowers startups to scale their operations, it is projected to have the following impacts:
- Direct Employment: Jobs in high-skill areas like engineering, software development, and manufacturing are expected to surge, with each investment generating potentially hundreds of direct job opportunities.
- Indirect Employment: Increased demand in logistics, supply chain, and professional services will generate additional jobs as businesses scale up.
- Strengthening India’s Space Workforce: By creating a skilled workforce in the space sector, the fund will strengthen India’s talent pool, driving further innovation and securing India’s position in the global space landscape.
IN-SPACe’s Role: Bridging Gaps in the Space Industry
Established in 2020, IN-SPACe plays a crucial role in overseeing private sector participation in the Indian space industry. By promoting regulatory reforms and collaborating with private companies, IN-SPACe has become a key driver in enabling startups to achieve scale and sustainability.
Comparative Global Landscape
India’s fund is one of several globally designed to stimulate growth in the space industry. For instance:
| Country | United Kingdom | Italy | Japan | Saudi Arabia |
| VC Fund | Seraphim Space Fund | Primo Space Fund | Space Strategic Fund | Neo Space Group (NSG) |
| Funding | GBP 30 million | EUR 86 million | USD 6.7 billion | By Public Investment Fund |
Positioning India as a Global Space Economy Leader
India’s current space economy is valued at USD 8.4 billion, representing around 2% of the global space market. However, with an ambitious goal to grow this to USD 44 billion by 2033, including exports worth USD 11 billion, the government envisions a shift in India’s global share to 7-8%. With around 250 startups already contributing to the Indian space ecosystem, the VC Fund is expected to fuel exponential growth by fostering innovation and supporting domestic technology advancements.
Conclusion:
The Rs. 1,000 crore VC Fund launched under IN-SPACe signifies a significant step towards transforming India’s space industry into a robust and self-reliant sector. By focusing on creating jobs, promoting domestic innovation, and scaling the space economy, the fund underlines India’s commitment to Atmanirbhar Bharat and to emerging as a leading global space power. With ample risk capital, startup-friendly reforms, and a strategic vision, India’s space sector is poised to soar into a new era of growth and self-reliance.
[1]Available at- https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2068155
[2] Ibid