The future of India’s space program is likely to be substantially different from what it has been so far, with an increasing number of missions focused on scientific research and planetary exploration

A spate of triumphs over the previous year, including the moon landing by Chandrayaan-3, has cemented India’s position as one of the world’s premier space powers. However, these triumphs are expected to serve as a springboard for more ambitious space missions in the coming years, many of which the Indian Space Research Organisation (ISRO) has already identified.

The future of India’s space program is likely to be substantially different from what it has been so far, with an increasing number of missions focused on scientific research and planetary exploration.

This would include exploratory flights to nearby planets such as Mars or Venus, more missions to the Moon, human spaceflight missions and the deployment of space-based observatories such as the Aditya-L1, AstroSat or the more recent XPoSat.

On the other side, the private sector expects more favourable outcomes from the upcoming Union Budget 2024-25 which is scheduled to be tabled on Wednesday. Indian Space Association (ISpA), the industry association representing private space companies in the country, has proposed recommendations with a focus on enhancing the financial well-being of the industry.

Key recommendations include the expansion of GST exemption to satellites, launch vehicles, ground equipment manufacturing and similar exemptions on procurement of key inputs. Other suggestions include tax holidays, exemptions for space sector firms, and concessions on customs duties for notified imports.

ISpA favours the lower tax rate of 5 per cent on external commercial borrowings given capital intensive nature and also reduces satellite sector withholding tax from 10 to 2 per cent given low-profit margins.

Interestingly, the association also says that the central government should introduce the Production-linked Incentive scheme for space-grade components on the lines of PLI for drones and should commit to procuring and adopting space tech solutions across domains like agriculture, disaster management etc.

It advocates SUC (Spectrum Usage Charges) as a percentage of AGR for satellite services allocated non-auctioned spectrum under the new Telecommunications Act of 2023.

Satellite operators should be permitted 25 per cent depreciation on one-time fees and licence charges to optimise tax impact and capital subsidy on infrastructure investments with additional subsidy for facilities in remote areas, which is proposed to spur manufacturing capabilities, launch infrastructure advancement and downstream space offerings growth in India's private space industry, according to the Space Association.

ISpA also seeks clarity on FDI policy for the space sector and associated aspects.

Director General of the Indian Space Association, Lt Gen AK Bhatt (Retd) welcomes the government’s recent reforms and its initiative to allocate satellite spectrum through an administrative approach.

Lt Gen Bhatt believes that these initiatives have the potential to boost the nascent private space industry in India and now to propel the space industry and drive innovation, the government must develop a comprehensive regulatory framework and address existing fiscal and taxation challenges.

“We urge the government to consider our recommendations for incentivising the growth of private space enterprises. By leveraging the momentum the government provides and its visionary policy, these enterprises can deliver significant socio-economic benefits to the nation,” he added.