Union Cabinet Approves ₹1,000 Crore Venture Capital Fund for Space Sector
The Union Cabinet, led by Prime Minister Narendra Modi, has approved the establishment of a ₹1,000 crore Venture Capital Fund aimed at advancing India’s burgeoning space sector.
The fund, which will be managed under the aegis of IN-SPACe (Indian National Space Promotion and Authorization Centre), is designed to support innovation, economic growth, and boost India’s global competitiveness in the space industry.
Financial Framework and Deployment Strategy
The fund will be deployed over a five-year period, with an annual investment range of ₹150-250 crore based on available opportunities. Investments will target approximately 40 startups, focusing on growth and late-growth stage companies. The equity investment will range from ₹10-60 crore, depending on the company’s stage, its growth trajectory, and its potential impact on India’s space capabilities.
Key Objectives of the Fund
The Venture Capital Fund is strategically designed to address several national priorities, including:
- Capital Infusion: Injecting capital to accelerate innovation in the space sector.
- Retaining Companies in India: Supporting Indian startups to prevent talent migration.
- Expanding the Space Economy: Driving the growth of India’s space economy, with the goal of expanding fivefold in the next decade.
- Atmanirbhar Bharat: Supporting the vision of a self-reliant India.
- Global Competitiveness: Strengthening India’s leadership in space technology through private sector participation.
Impact on Employment and Growth
The fund is expected to generate significant employment opportunities, creating hundreds of direct jobs in engineering, software development, data analysis, and manufacturing. Thousands of indirect jobs will also be created across the supply chain, logistics, and professional services. By nurturing a robust startup ecosystem, the fund will drive innovation and strengthen India’s position in the global space market.
Background and Strategic Vision
As part of its 2020 space sector reforms, the Government of India established IN-SPACe to foster private sector participation in space activities. With the Indian space economy currently valued at $8.4 billion and a target of reaching $44 billion by 2033, this government-backed fund is a crucial step toward achieving these goals. It will serve as an Alternative Investment Fund under SEBI regulations, supporting early-stage startups and enabling them to attract further private equity investments.
