State-run India Infrastructure Finance Company Limited (IIFCL) is advocating for the inclusion of the space sector in the government's infrastructure classification, which would facilitate easier financing for projects related to satellite manufacturing and operations. This proposal comes as IIFCL aims to enhance its role in supporting India's burgeoning space industry, particularly through partnerships with the Indian Space Research Organisation (ISRO) and its commercial arm, NewSpace India Ltd. (NSIL) .

IIFCL's chairman, PR Jaishankar, stated that recognizing the space sector as part of the infrastructure sector would significantly improve financing options. The firm has already disbursed approximately ₹18,000 crore in loans during FY24 and is involved in transaction advisory services for ISRO .

IIFCL is working on a framework to boost the production of Launch Vehicle Mark 3 through public-private partnerships. This initiative aims to enhance India's capabilities in launching satellites and conducting commercial space missions .

The Indian government has recently revised its FDI policy to allow up to 74% foreign investment in satellite manufacturing and related segments under an automatic route. This change is expected to attract more private investment into the space sector .

Jaishankar pointed out that while there is potential for increased private investment in infrastructure, actual investments may only materialize once capacity utilization exceeds 75-80%. He also highlighted concerns over rising costs of funds following a recent increase in risk weights for loans to non-banking financial companies (NBFCs) by the Reserve Bank of India .

IIFCL plans to go public by FY25 and is looking to leverage its position as a key financier for infrastructure projects, including those in the space sector. The company aims to unlock value for government benefits while enhancing the overall investment landscape in India's space endeavors .