NEW DELHI (PTI): The Government will set up a venture capital fund of Rs 1,000 crore to promote space technology, Finance Minister Nirmala Sitharaman said on Tuesday, an announcement welcomed warmly by the industry.

Several stakeholders, including the Indian Space Association (ISpA) as well as the heads of the Indian National Space Promotion and Authorisation Centre (IN-SPACe) and Pixxel Space, said the provisions announced in Budget 2024-25 would fuel growth and development of the sector.

“With our continued emphasis on expanding the space economy by five times in the next 10 years, a venture capital fund of Rs 1,000 crore will be set up,” Sitharaman said in the Lok Sabha while presenting the Union Budget.

According to IN-SPACe chairperson Pawan Goenka, the announcement of a focused venture fund of Rs 1,000 crore will give a major boost to new entrepreneurs and non-government entities (NGEs) in the space sector.

He said INSPACe looked forward to supporting the growth of the space economy and nurturing an enabling ecosystem for NGEs.

“The fund along with the existing policies for the space sector will fuel technological innovation and create a fertile ground for NGEs to thrive,” Goenka told PTI.

Bengaluru-based start-up Pixxel Space CEO Awais Ahmed said the venture capital fund will provide crucial financial support to innovative startups and companies, enabling them to scale their technologies and contribute to India's space ambitions.

“Such a significant investment underscores the government's commitment to fostering a robust and dynamic space ecosystem,” Ahmed told PTI.

Chennai-based start-up Agnikul Cosmos added that the venture capital fund will help larger players emerge out of India’s startup ecosystem.

“Wonderful news for all of us in the sector... This also shows that the government is continuing to strongly back its vision of making India have a larger chunk of the global space economy,” Agnikul Cosmos CEO Srinath Ravichandran said.

The VC fund addresses a crucial funding gap in nascent space R&D and this initiative will be transformative in building sovereign capabilities, fostering local IP creation, and driving innovation, according to KaleidEO COO Arpan Sahoo.

In the view of industry body Indian Space Association, the move demonstrates the government’s commitment to the sector.

“The announcement of a Rs 1,000 crore VC fund is a step forward, addressing the funding challenges faced by these nascent ventures in this capital-intensive domain,” ISpA Director General Lt Gen AK Bhatt (Retd) said.

The establishment of 12 industrial parks across India will also provide a substantial boost to the space and satellite manufacturing industry, which has long called for the creation of space parks.

“These measures are pivotal for the growth and development of India's space ecosystem,” Bhatt said.

"The announcement of the Rs 1,000 crore venture capital fund for the space sector is a commendable initiative that will significantly foster innovation and growth within this critical industry. Every rupee invested promises substantial returns, as the space sector holds immense potential for contributing to GDP growth and enhancing national infrastructure,” said Anil Prakash, director general of the Satcom Industry Association-India.