New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the establishment of a ₹1,000 crore Venture Capital (VC) Fund dedicated to advancing India’s burgeoning space sector. The fund, under the aegis of the Indian National Space Promotion and Authorization Center (IN-SPACe), aims to propel the growth of space startups and strengthen India’s position as a global space power.
Financial Deployment Plan
The fund’s deployment is planned over a period of five years, starting from 2025-26, with an annual investment range of ₹150 crore to ₹250 crore, depending on the opportunities available. The proposed financial deployment schedule is as follows:
| Financial Year | Estimated Investment (₹ Crore) |
|---|---|
| 2025-26 | 150.00 |
| 2026-27 | 250.00 |
| 2027-28 | 250.00 |
| 2028-29 | 250.00 |
| 2029-30 | 100.00 |
| Total | 1,000.00 |
The fund will support approximately 40 startups, with investment amounts ranging from ₹10 crore to ₹60 crore depending on the stage of the company and its potential impact on India’s space capabilities. Growth-stage startups will receive between ₹10 crore and ₹30 crore, while late-growth-stage startups could secure between ₹30 crore and ₹60 crore in funding.
Strategic Objectives
The ₹1,000 crore VC fund is designed to address key national priorities and bolster the space sector through initiatives that include:
- Capital Infusion to attract additional investments and instill confidence in private investors.
- Retaining Space Companies in India, countering the trend of Indian space firms domiciling abroad.
- Growing India’s Space Economy, with the goal of expanding the sector five-fold over the next decade.
- Accelerating Space Technology Development by driving private sector participation.
- Boosting Global Competitiveness to position India as a leading space economy.
- Supporting Atmanirbhar Bharat by promoting self-reliance in space technology.
- Creating a Vibrant Innovation Ecosystem that fosters research and development.
- Driving Economic Growth and Job Creation through startups across the space supply chain.
- Ensuring Long-Term Sustainability by supporting advancements that align with global space trends.
Impact on Employment and Innovation
The fund is expected to significantly boost employment in the Indian space sector, supporting startups in areas such as engineering, software development, data analysis, and manufacturing. Each investment has the potential to generate hundreds of direct jobs and thousands of indirect opportunities in supply chains, logistics, and professional services. The initiative will also cultivate a skilled workforce, positioning India to compete globally and drive innovation in space technology.
Background
As part of its 2020 space sector reforms, the Government of India established IN-SPACe to oversee and promote private sector participation in space activities. With the space economy currently valued at $8.4 billion and projected to reach $44 billion by 2033, the need for risk capital has become critical. The newly proposed VC fund is designed to address this gap, as traditional lenders have been hesitant to invest in high-tech space startups.
The fund will act as an Alternative Investment Fund (AIF) under SEBI regulations, providing early-stage equity to startups. This support will enable space startups to scale and attract further private equity investments, ensuring the continued growth of India’s space ecosystem and preventing talent loss to overseas markets.
This initiative marks a significant milestone in India’s space journey, reaffirming the government’s commitment to fostering innovation, economic growth, and self-reliance in the critical space sector.
