Prime Minister Narendra Modi hailed the Union Cabinet’s decision to set up a ₹1,000 crore Venture Capital (VC) Fund dedicated to the space sector, stating that it will have a phenomenal impact on the youth and foster innovation in India’s growing space industry.
In a post on X, PM Modi expressed optimism about the fund’s role in creating opportunities for young innovators. “Excellent news for the space sector! The Cabinet’s decision to establish a Venture Capital Fund will give opportunities to several innovative minds and add momentum to our space programme,” he said.
The Union Cabinet on Wednesday approved the creation of the VC fund under the supervision of IN-SPACe (Indian National Space Promotion and Authorization Center), established as part of the 2020 space reforms to promote private sector involvement in space activities.
Briefing reporters after the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw explained that the deployment period for the fund is planned for five years. “The fund will invest approximately ₹150-250 crore annually, depending on the investment landscape and requirements of startups,” Vaishnaw said, underscoring the government’s commitment to fostering the space ecosystem.
The ₹1,000 crore fund aims to provide critical early-stage equity to startups, addressing the funding gap in the high-tech space sector. Traditional lenders have been reluctant to invest in space startups due to the inherent risks, making this government-backed initiative crucial to prevent talent loss to other countries.
Currently, India’s space economy is valued at $8.4 billion, with a target to expand it to $44 billion by 2033. With over 250 startups operating across the space value chain, timely financial support is essential to ensure their growth and sustainability, according to a government release.
The government’s backing of the VC fund is expected to bolster investor confidence, attract private capital, and signal its ongoing commitment to advancing space reforms. The fund will operate as an Alternative Investment Fund (AIF) under SEBI regulations, providing startups with the financial resources needed to scale and attract further private equity investments.
This initiative aligns with India’s broader ambitions to strengthen its presence in the global space sector by fostering an ecosystem that encourages innovation and entrepreneurship. “The government’s proactive measures will ensure the rapid development of startups and enable India to remain competitive in the global space economy,” the release said.
(Inputs from ANI)
