Alongside higher allocations proposed over the next three Union Budgets, the industry association has urged a unique hybrid Production Linked Incentive (PLI) scheme to draw global investment into India’s fast‑growing space economy.
Industry body Satcom Industry Association of India (SIA-India) has urged higher allocation for the space sector in the Union Budget 2026-27, along with a first-of-its-kind hybrid Production Linked Incentive (PLI) scheme for competitive ventures that could attract global investment into the sunshine sector.
In a set of recommendations prepared jointly with infrastructure and advisory consultancy, KPMG India, SIA-India has pointed out that despite over 300 startups and 867 applications to space regulator IN-SPACe, spanning satellites, payloads, launch systems and deep-space technologies, the surge in industry capacity is not matched by public funding.
“India still allocates only 0.04 per cent of GDP to space, significantly lower than major global space economies,” the association said in a statement shared with INFRASTRUCTURE TODAY.
Noting that the cost of maintaining the status quo is far higher than the fiscal outlay required, the association has sought timely and well-calibrated action in its submission to Finance Minister Nirmala Sitharaman.
Subba Rao Pavuluri, President, SIA-India, said the Union Budget must plan for the long haul.
“From secure communications and navigation to climate systems, launch infrastructure and disaster resilience, every layer of our national architecture now depends on space assets. Granting space the status of critical infrastructure and decisively expanding public investment is essential if we are to match our strategic aspirations and secure our leadership in the Indo-Pacific.”
SIA-India seeks a progressive expansion of the country’s space budget toward the internationally competitive benchmark of 0.12 per cent of GDP. Especially when space-based systems such as satellite communications, Earth Observation (EO) and Positioning, Navigation and Timing (PNT) are already functioning as critical national infrastructure. These services support governance, digital services, logistics, payments, climate monitoring, defence readiness and disaster resilience.
According to data from Tracxn, a Bengaluru-based startup intelligence platform, accessed by INFRASTRUCTURE TODAY, India’s space startup ecosystem attracted $77.6 million in funding in FY2025-26 to date, compared to $70.6 million in FY2024-25. The latest being the $17 million fundraise by Chennai‑based AgniKul Cosmos, builder of launch vehicles, which valued the company at around $500 million.
Multi-Year Space Funding
SIA-India’s roadmap for expanding space spending suggests consecutive increases over three budgets: from 0.06 per cent to 0.09 per cent to 0.12 per cent of GDP. This would allow the government to scale investment without shock expenditure, while aligning with Organization for Economic Co‑operation and Development (OECD) and leading spacefaring benchmarks.
Anil Prakash, Director General, SIA-India, opined, “All recommendations in our submission have been carefully examined and prioritised to ensure they are practical, evidence-based and aligned with national objectives as well as global best practices. The measures we propose reflect areas where India can secure long-term strategic advantage with modest, targeted support today, fully aligned with Space Policy 2023, IN-SPACe’s decadal vision, and the government’s overall agenda.”
Other key recommendations include a hybrid PLI scheme tailored for long-cycle, low-volume space manufacturing to de-risk scale-up and attract global joint ventures. Its blended incentive structure, with 25-30 per cent output-linked and the remainder tied to capital investment, exports, testing and certification readiness, capability development, and intellectual property creation, supports end-to-end readiness from R&D to exports.
SIA-India has also recommended dedicated Harmonised System of Nomenclature/Service Accounting Code (HSN/SAC) codes for space-grade components, the designation of a certifying authority for customs exemptions, and a unified process for clearances.
It further suggests pilot clean-room inspection zones at major customs ports such as Bengaluru, Hyderabad and Chennai, and a dedicated Universal Service Obligation Fund (USOF)-backed National Satellite Connectivity Mission to ensure digital inclusion in remote, disaster-prone and economically unviable regions.
– Manish Pant