The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the establishment of a ₹1,000 crore venture capital fund aimed at supporting space startups, under the supervision of IN-SPACe, an autonomous government body within the Department of Space (DOS). According to the Cabinet’s announcement on Thursday, the fund will be deployed over a five-year period, with operations expected to begin in FY26.
The fund’s annual investment is projected to range between ₹150-250 crore, depending on investment opportunities and startup requirements. For FY26, ₹150 crore is slated for deployment, increasing to ₹250 crore annually for FY27-29, and concluding with ₹100 crore in FY30.
Investments per startup are anticipated to range from ₹10-60 crore, depending on the company’s growth stage and its potential to enhance national space capabilities. Growth-stage startups may receive between ₹10-30 crore, while late-stage ventures could see investments between ₹30-60 crore.
The Cabinet highlighted that the initiative is expected to boost employment within the space sector by supporting startups across the entire space value chain—upstream, midstream, and downstream. This will help companies scale operations, invest in R&D, and expand their workforce. Each investment is projected to create hundreds of direct jobs in areas such as engineering, software development, and manufacturing, with thousands of indirect jobs in supply chains and logistics.
IN-SPACe, established as part of the government’s 2020 space reforms to encourage private sector participation, proposed the ₹1,000 crore VC fund to support India’s space economy, currently valued at $8.4 billion, with a target to grow to $44 billion by 2033.
With around 250 space startups emerging in the sector, timely financial support is crucial to ensure their growth and prevent talent loss abroad, the Cabinet noted. The fund will operate as an Alternative Investment Fund under SEBI regulations and was initially announced in the 2024 budget by Finance Minister Nirmala Sitharaman.
Indian space startups secured $126 million in funding in 2023, a 7% increase from $118 million in 2022, according to Tracxn’s Space Tech Geo Report 2024.