Union Budget 2026: Space industry seeks ‘critical infrastructure’ status, govt procurement push
Ahead of the Union Budget, India’s private space industry urges the government to classify space assets as critical infrastructure, unlock low-cost financing, and boost domestic procurement to scale startups and strengthen national capabilities.
Ahead of the Union Budget, India’s emerging private space industry has urged the government to classify space assets as critical infrastructure and allocate funds to procure products and services from domestic companies.
“Being a big anchor customer, I think government support has to be around,” said Awais Ahmed, Founder and CEO of Pixxel Space.
Ahmed noted that the government has taken positive steps by introducing a research, development and innovation fund, along with a deep-tech fund. He added that capital must now start flowing into capex-heavy businesses that have the potential to make India a global powerhouse in the space and AI sectors.
Call to classify space assets as critical infrastructure
The Indian Space Association (ISpA), along with consultancy firm Deloitte, has recommended that the government formally recognise space assets as critical infrastructure to enable access to low-cost, long-term financing.
“Recognising space infrastructure as a distinct infrastructure sub-sector is essential to unlock scale, private investment, and global competitiveness,” ISpA said.
The industry body noted that Indian private players now have proven capabilities across satellites, launch systems, Earth-observation data and ground infrastructure. However, the absence of assured government demand continues to limit their ability to scale.
“A formal procurement mandate will anchor industry growth while allowing ISRO to focus on strategic and exploratory missions,” ISpA said.
Government procurement seen as key growth driver
ISpA pointed out that NASA procures nearly 80 per cent of its systems from private industry, while the European Space Agency (ESA) follows a 90 per cent industry-led procurement model.
“Recognising space infrastructure as critical infrastructure can unlock low-cost financing, while rationalising taxes and duties on specialised launch components, along with reducing Customs GST and indirect taxes for deep tech, can significantly alleviate cost pressures,” said Srinath Ravichandran, Founder and CEO of Agnikul Cosmos.
Ravichandran added that deeper, outcome-driven collaboration with ISRO and IN-SPACe, along with clearer long-term procurement commitments, will be equally important. Agnikul Cosmos is planning the maiden orbital flight of its launch vehicle Agnibaan to place small satellites into low Earth orbit.
Industry seeks fiscal incentives and funding support
Suyash Singh, Co-Founder and CEO of GalaxEye, said targeted fiscal incentives for indigenous satellite manufacturing and payload development, combined with expanded government-backed funding pools for deep-tech and space missions, could significantly de-risk early deployments.
Singh emphasised that clarity on long-term procurement policies, particularly for defence and strategic geospatial applications, is critical for startups to plan mission-ready platforms with confidence.
GalaxEye aims to launch Mission Drishti, a multi-sensor satellite designed to enable all-weather Earth imaging by integrating optical and radar data.
“Additionally, policy support for downstream commercialisation of satellite data through standardised access frameworks and incentives for data adoption can unlock wider economic value while strengthening India’s strategic and climate-monitoring capabilities,” Singh said.
Space infrastructure’s role in national resilience
ISpA and Deloitte highlighted that space infrastructure underpins key sectors such as telecommunications, defence, navigation, finance, weather forecasting, disaster management and governance.
They said formal recognition of space infrastructure would enable infrastructure-grade financing, reduce the cost of capital by 2–3 per cent, and strengthen national resilience.
ISpA also recommended that all ministries, state governments and urban local bodies procure satellite imagery and geospatial data exclusively from empanelled Indian companies.
The association further suggested establishing a geo-tagging framework for all space entities and authorised users, restricting access to sensitive satellite data to approved and geo-tagged entities to ensure data security and regulatory compliance.
Push to strengthen downstream space economy
Krishanu Acharya, Co-Founder and CEO of Suhora Technologies, said targeted measures are needed to accelerate the downstream space economy, particularly in converting satellite data into actionable insights for defence, agriculture, disaster management and climate resilience.
“With increasing adoption and demand for geospatial intelligence among government and defence agencies, we also want to propose a specialised fund for skilling talent pipelines and academia on priority use cases,” Acharya said.
He also expects the Budget to significantly increase defence allocations for satellite data analytics to support intelligence, surveillance and reconnaissance (ISR), terrain monitoring and maritime domain awareness, driving deeper integration of Made-in-India private solutions into defence operations.
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