India will get a Rs 1000 crore venture capital fund to boost the space sector. The fund aims to address the need for risk capital, as traditional lenders are hesitant to fund startups in this high-tech sector.
There are nearly 250 space startups emerging across the value chain which may need financial support, the cabinet note said.
This approval was given by the union cabinet on Thursday as part of its 2020 space sector reforms. Under these reforms, the government set up IN-SPACe to promote and oversee private sector participation in space activities.
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The officials said the Rs 1000 crore venture capital fund would support the growth of India's space economy, currently valued at S8.4 billion, with a target to reach $44 billion by 2033.
"The proposed government-backed fund will boost investor confidence, attract private capital, and signal the government's commitment to advancing space reforms," the cabinet statement said.
The proposed Rs 1,000 crore VC fund is planned to be up to five years from the actual date of start of the fund operations.
The average deployment amount could be Rs 150-250 crore per year, depending on the investment opportunities and fund requirements.
The government said the fund will create a multiplier effect by attracting additional funding for later-stage development, thereby instilling confidence in private investors along with retention of space companies domiciled within India. This will help counter the trend of Indian companies setting base abroad.
