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New Delhi: The Union Cabinet chaired by Prime Minister Narendra Modi on Thursday approved setting up of a Rs 1,000 crore venture capital fund dedicated for the space sector, which is expected to benefit 40 startups and accelerate private investments.
Addressing a media briefing Union Minister Ashwini Vaishnaw said the fund would promote startups in the space sector. "This reflects Prime Minister Narendra Modi’s commitment towards creating more and more opportunities for our youth," he said.
This fund will be utilised to provide support to startups over a period of 5 years from the actual start of the fund operations. The average deployment amount could be Rs 150-250 crore per year, depending on the investment opportunities and fund requirements, as per an official statement released after the cabinet meeting.
The proposed amount for the financial year 2025-26 stands at Rs 150 crore followed by Rs 250 crore each is 2026-27, 2027-28 and 2028-29. For fiscal 2029-30 the proposed amount is Rs 100 crore.
The indicative range of investment is proposed to be Rs 10 to 60 crore, contingent upon the stage of the company, its growth trajectory, and its potential impact on national space capabilities. In the ‘growth stage’ the investment range would be Rs 10 to 30 crore, while for ‘late growth stage’ it will be in the range of Rs 30 to 60 crore.
The fund will be used for providing early-stage equity to startups and enabling them to scale for further private equity investments. The announcement in this regard was made by Finance Minister Nirmala Sitharaman in the Union Budget presented in July.
According to the official data, the size of India’s space sector is estimated to reach $44 billion by 2033 from the current around $8.4 billion.
“The fund aims to address the critical need for risk capital, as traditional lenders are hesitant to fund startups in this high-tech sector,” the Department of Space said in a statement.
With nearly 250 space startups emerging across the value chain, timely financial support is crucial to ensure their growth and prevent talent loss overseas. The proposed government-backed fund will boost investor confidence, attract private capital, and signal the government's commitment to advancing space reforms, it said.
The fund will be structured as an Alternative Investment Fund of Category 1 and 2, as per the regulations of the Securities and Exchange Board of India (SEBI). Management of the fund will be jointly handled by SIDBI (Small Industries Development Bank of India) and SBI (State Bank of India), ensuring professional oversight and guidance.
The fund has been set up under the aegis of Indian National Space Promotion and Authorization Centre (IN-SPACe), a single-window, independent, nodal agency dedicated to promote and oversee private sector participation in space activities in the country.