The Union Cabinet, under the leadership of Prime Minister Narendra Modi, has approved the establishment of a ₹1,000 crore venture capital fund aimed at fostering the growth of space startups in India. Managed by IN-SPACe (Indian National Space Promotion and Authorization Center), an autonomous body within the Department of Space (DOS), this initiative is set to kick off in FY26.
Over the next five years, the fund will allocate investments ranging from ₹150 crore to ₹250 crore annually, based on startup demand and available opportunities. The fund will begin with ₹150 crore in FY26, increase to ₹250 crore annually from FY27 to FY29, and conclude with ₹100 crore in FY30.
Individual startup investments will vary between ₹10 crore and ₹60 crore, depending on their development stage and contribution potential to India’s space capabilities. Early-stage ventures could receive ₹10-30 crore, while late-stage companies may be allocated ₹30-60 crore.
This initiative is expected to significantly enhance job creation within India’s space industry by supporting startups across all sectors of the space value chain—ranging from upstream research and development to downstream manufacturing and services. The Cabinet estimates that each investment will create hundreds of direct jobs in fields such as engineering, software development, and manufacturing, with thousands of additional jobs in logistics, supply chains, and related sectors.
IN-SPACe, established as part of India’s 2020 space reforms to encourage private sector participation, proposed the fund to accelerate the country’s space economy, currently valued at $8.4 billion, with an ambitious target of $44 billion by 2033.
India’s burgeoning space startup ecosystem, with approximately 250 companies, requires timely financial backing to ensure sustainable growth and retain talent within the country. The fund will operate as an Alternative Investment Fund (AIF) under SEBI regulations, an initiative initially outlined in the 2024 Union Budget by Finance Minister Nirmala Sitharaman.
In 2023, Indian space startups secured $126 million in funding, marking a 7% increase from $118 million in 2022, according to Tracxn’s Space Tech Geo Report 2024.