SIA-India Advocates for Increased Space Budget and Hybrid Manufacturing Incentives

The Satcom Industry Association-India (SIA-India) has made a compelling case for a significant increase in India’s space budget, urging the government to triple its current allocation. In a series of pre-budget submissions to key government bodies, the association highlighted the need for specialized manufacturing incentives and long-term funding frameworks to enhance connectivity, navigation, and earth observation capabilities. With India’s public spending on space at a mere 0.04% of GDP, SIA-India argues that a phased increase in budget allocations is essential to align with global standards and support the country’s ambitions in the space sector.

Call for Increased Space Budget

SIA-India has proposed a phased increase in the national space budget, starting with an allocation of approximately Rs 18,000 crore in the upcoming fiscal year. This would be followed by subsequent increases to Rs 27,000 crore and Rs 36,000 crore over the next four years. The association believes that this increase would elevate India’s spending on space to 0.12% of GDP, a level more in line with leading spacefaring nations. Such funding is deemed crucial for enhancing launch capabilities, developing satellite constellations, and establishing new testing infrastructure, thereby fostering growth in the private sector.

The association’s president, Subba Rao Pavuluri, emphasized that India’s position in the global space economy relies heavily on long-term investments in capability development. He pointed out that various sectors, including secure communications, navigation, and disaster resilience, increasingly depend on space assets. To achieve strategic aspirations and maintain leadership in the Indo-Pacific region, SIA-India advocates for recognizing space as critical infrastructure and significantly boosting public investment.

Classification of Space Systems as Critical Infrastructure

In its recommendations, SIA-India urged the government to classify satellite communications, Earth observation, and NavIC-based navigation as national critical infrastructure. The association argues that these systems are vital for financial networks, telecommunications, logistics, governance, and disaster response. By prioritizing the protection and planning of these systems, the government can ensure their reliability and effectiveness.

A key recommendation includes the introduction of a hybrid Production-Linked Incentive (PLI) scheme tailored for low-volume, high-reliability space components. SIA-India contends that traditional PLIs are not suitable for space manufacturing. Instead, they propose incentives linked to capital investment, testing, export readiness, and component qualification. The association has identified several areas, such as radiation-hardened electronics and precision optics, where India currently relies on imports, highlighting the need for domestic production capabilities.

Tax and Regulatory Reforms for Space Manufacturing

SIA-India has also called for clearer tax regulations and classification rules for space-grade components. This includes the establishment of dedicated Harmonized System of Nomenclature (HSN) codes, rationalization of Goods and Services Tax (GST) to reduce embedded costs, and mechanisms for zero-rating or refunds for satellite manufacturing and launch services. Additionally, the association seeks accelerated depreciation on space-grade equipment and an extension of the business-loss carry-forward period to fifteen years, reflecting the long development cycles typical in the space industry.

To streamline customs processes, SIA-India recommends the creation of clean-room inspection zones at major ports to protect sensitive hardware from damage. These reforms aim to enhance the efficiency and competitiveness of India’s space manufacturing sector, enabling it to better meet domestic and international demands.

Long-term Plans for Earth Observation and Launch Infrastructure

In its submissions to the Department of Space and ISRO, SIA-India proposed the establishment of long-term budgets for a national Earth observation procurement plan and a NavIC capability expansion program. The association also advocates for the development of public-private testing hubs equipped with advanced facilities, such as thermal-vacuum chambers and vibration rigs, calibrated to ISRO standards.

Furthermore, SIA-India is pushing for budget support to expand launch infrastructure, including the construction of a third launch pad and shared engine-test facilities for private vehicle developers. The association has also recommended the creation of a national space-economy measurement system and operational guidelines for the Rs 1,000 crore space venture fund. This fund would support a multi-year National Satellite Connectivity Mission, aimed at enhancing satellite backhaul and broadband services in approximately 40,000 challenging gram panchayats, along with providing financial support for user terminals and domestic high-throughput satellite capacity.

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