As Finance Minister Nirmala Sitharaman prepares to present the Union Budget next week, the private space sector has outlined several key expectations. Among the primary requests are the inclusion of space sector-related imports in the list of tax-exempt items, an exemption from the Goods and Services Tax (GST) for components used in launch vehicles, and the introduction of productivity-linked incentives (PLI). Additionally, the sector hopes for a more proactive role from the government, particularly by stepping in as an anchor customer to support the nascent private space industry.
"More money for space-related acquisitions, tax holidays, import holidays, and PLI scheme for space," Pixxel Space co-founder and CEO Awais Ahmed told the media when asked about his wishlist for the budget.
ISpA seeks government space tech adoption
Meanwhile, prominent industry bodies such as the Indian Space Association (ISpA) and the Satcom Industry Association (SIA-India) have voiced these demands. They emphasise the need for increased government expenditure on the space sector, which they believe is crucial for the growth and sustainability of private enterprises within the industry. "ISpA calls for a commitment from the government to procure and adopt space technology solutions across various governance areas such as agriculture, disaster management, infrastructure planning and development monitoring, urban development, and remote area connectivity," ISpA director general Lt Gen Anil K Bhatt (retd) said.
Bhatt also sought an extension of GST waiver on satellite launch services to other critical components of satellites, ground systems, and launch vehicles. He also wanted the finance minister to consider tax exemptions/tax holiday and custom-duty exemptions for space sector firms and reduction of tax rate on interest on foreign borrowings. "The prompt implementation of the Space Activities Act is crucial for addressing legal and standards-related issues, providing a clear regulatory framework for the industry," Bhatt added.
SIA-India urges boost for space startups
Meanwhile, SIA-India president Subba Rao Pavuluri said the Budget should prioritize measures to propel the commercial space sector, with a focus on nurturing deeptech space startups. SIA-India director general Anil Prakash made a strong pitch for a substantial increase in the space budget to align with space-faring nations, alongside dedicated funds for local manufacturing and capability building. Prakash urged the government to recognize the potential of market segments such as rural broadband, enterprise connectivity, maritime, aviation, and disaster management.
It should be mentioned here that the Indian Space Association has also advocated for a Digital Public Infrastructure and Digital Public Goods approach to Earth observation-based geospatial analytics and insights. This strategy, they argue, has the potential to unlock significant value and spur innovation across a wide array of stakeholders, extending far beyond the confines of the space sector.
(With PTI inputs)
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