Cabinet clears IK-cr fund to support space start-ups over 5 years

• The Union Cabinet on Thursday approved setting up of a Rs 1,000-crore venture capital fund to support 30 to 35 space start-ups over a period of five years, which, the government hopes, will attract private funding.

Highlights:

• The Union Cabinet has sanctioned a Rs 1,000-crore venture capital fund to support 30-35 Indian space start-ups over the next five years. This initiative is part of India’s goal to capture a significant share of the global space market, currently valued at $8.4 billion, with a target of growing to $44 billion.

Focus on Early-Stage Support and Commercialization

Investment Criteria and Start-Up Support:

• Start-ups at various development stages will receive funding between Rs 10 to Rs 60 crore, focusing on those with proof of concept needing commercialization. Union Minister Ashwini Vaishnaw emphasized that early funding can significantly increase a start-up's success rate.

Growth Potential of India’s Space Sector:

• Since liberalizing the space sector in 2020, India has seen a surge to 250 space start-ups. This new fund is expected to drive further growth, create thousands of direct and indirect jobs, build manufacturing capabilities, and support supply chain development in the sector.

Deployment and Management of the Fund

Funding Timeline:

• An initial deployment of Rs 150 crore is planned for 2025-26, followed by Rs 250 crore over the next three years, and Rs 100 crore in the final year. The fund, structured as an alternative investment fund as per SEBI guidelines, will be managed by professional investment managers.

Inspiring Private Investment:

• Lt Gen A K Bhatt (Retd), Director General of the Indian Space Association, noted that this fund will not only propel start-up growth but also encourage private investors to view the Indian space sector as a viable investment opportunity.

Advancing Innovation and India’s Global Competitiveness:

• This fund aims to drive innovation in areas such as satellite and launch vehicle technology, space applications, and other advanced space technologies. Minister Vaishnaw highlighted that the fund’s support for space start-ups aligns India’s ecosystem with those of other major space-faring nations, strengthening India's position in the global space economy.

Prelims Takeaways:

• India's space achievements