The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the creation of a ₹1,000 crore Venture Capital Fund dedicated to the space sector, under the supervision of the Indian National Space Promotion and Authorization Center (IN-SPACe).

Announcing the decision, Information and Broadcasting Minister Ashwini Vaishnaw said the fund aims to support the development of space startups, with a planned deployment period of up to five years from the start of operations. “The Union Cabinet today approved the setting up of a ₹1,000 crore Venture Capital Fund to promote startups in the space sector,” Vaishnaw said.

The fund is expected to deploy an average of ₹150-250 crore per year, depending on the investment landscape and startup requirements. As part of India’s 2020 space reforms, IN-SPACe was established to promote private sector participation in space activities, facilitating the expansion of India’s space economy—currently valued at $8.4 billion—with a goal to reach $44 billion by 2033.

This fund addresses a critical gap in financing, as traditional lenders have been reluctant to support startups in the high-tech space sector due to the associated risks. India now hosts nearly 250 space startups operating across various segments of the value chain, and timely financial backing is essential to foster their growth and retain talent within the country.

“The government-backed fund will boost investor confidence, attract private capital, and reaffirm the government’s commitment to advancing space reforms,” a statement said. The initiative will operate as an Alternative Investment Fund under SEBI regulations, providing early-stage equity to space startups and enabling them to scale for future private equity investments.

(Inputs from ANI)