The Union Cabinet, led by Prime Minister Shri Narendra Modi, has given the green light for the establishment of a ₹1,000 crore Venture Capital Fund aimed at bolstering India’s space sector under the framework of IN-SPACe. This initiative seeks to enhance the country’s capabilities in space technology while fostering innovation and economic growth.

The fund will have a deployment timeline of up to five years from its operational start date, with an anticipated annual investment ranging between ₹150 crore and ₹250 crore based on market opportunities and the fund’s financial needs. The projected annual allocation is detailed as follows:
● 2025-26: ₹150 crore
● 2026-27: ₹250 crore
● 2027-28: ₹250 crore
● 2028-29: ₹250 crore
● 2029-30: ₹100 crore

Investment Strategy

The fund is designed to provide capital to around 40 startups, with investments expected to fall within the ₹10 crore to ₹60 crore range, contingent on each company’s stage of development and potential impact on national space objectives. Investment categories include:

● Growth Stage: ₹10 crore to ₹30 crore
● Late Growth Stage: ₹30 crore to ₹60 crore

Strategic Objectives

This initiative aims to position India as a leader in the global space economy by addressing several key areas:

● Infusing capital into the sector
● Retaining domestic space companies
● Expanding the space economy
● Accelerating technological advancements
● Enhancing global competitiveness
● Supporting the Atmanirbhar Bharat initiative
● Creating a vibrant innovation ecosystem
● Driving economic growth and job creation
● Ensuring long-term sustainability

Economic Impact and Employment Generation

The establishment of this fund is expected to significantly enhance employment opportunities within the Indian space sector. By supporting startups across the entire space supply chain—upstream, midstream, and downstream—the fund will enable businesses to scale, invest in research and development, and grow their workforce. Each investment has the potential to create hundreds of direct jobs in areas such as engineering, software development, and manufacturing, alongside thousands of indirect jobs across various sectors.

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This initiative aligns with the Indian government’s 2020 reforms aimed at invigorating the space sector, including the establishment of IN-SPACe to facilitate private sector engagement in space endeavours. The proposed ₹1,000 crore fund is part of a broader strategy to elevate the value of India’s space economy from its current valuation of $8.4 billion to $44 billion by 2033. By providing critical risk capital, the fund is set to encourage private investment and strengthen the nation’s position in the global space landscape. This government-backed initiative not only aims to enhance investor confidence but also underscores the commitment to advancing reforms in the space sector, ensuring that India remains at the forefront of global space innovation and competitiveness.

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