Budget 2026 expectations: Private space firms seek procurement push, critical infrastructure status for sector

Ahead of the Union Budget, India’s fast-growing private space industry has called on the government to step up public procurement of space products and services and formally recognise space assets as critical infrastructure to unlock financing and accelerate scale-up.Industry leaders said assured government demand, along with easier access to long-term capital, is essential for domestic companies operating in capital-intensive segments such as satellites, launch vehicles and downstream data services.“Being a big anchor customer, I think government support has to be around,” Awais Ahmed, founder and CEO of Pixxel Space, told PTI. He said recent initiatives such as the research, development and innovation fund and the deep-tech fund were positive steps, but stressed that capital must now start flowing into capex-heavy businesses that can make India a global force in space and AI.The Indian Space Association (ISpA), along with consultancy firm Deloitte, has recommended that the government classify space infrastructure as a critical sub-sector. Such recognition, they said, would enable access to low-cost, long-tenure financing and reduce the sector’s cost of capital.“Recognising space infrastructure as a distinct infrastructure sub-sector is essential to unlock scale, private investment, and global competitiveness,” ISpA said, adding that Indian private players now have proven capabilities across satellites, launch systems, Earth observation data and ground infrastructure.However, the industry body flagged the absence of assured government procurement as a key constraint. “A formal procurement mandate will anchor industry growth while allowing ISRO to focus on strategic and exploratory missions,” it said.ISpA pointed out that international agencies follow industry-led procurement models, with NASA sourcing around 80 per cent of its systems from private companies, while the European Space Agency procures nearly 90 per cent through industry.“Recognising space infrastructure as critical infrastructure can unlock low-cost financing, while rationalising taxes and duties on specialised launch components, along with reducing Customs GST and indirect taxes for deep tech, can significantly alleviate cost pressures,” Srinath Ravichandran, founder and CEO of Agnikul Cosmos, told PTI.He also underlined the need for deeper, outcome-driven collaboration with ISRO and IN-SPACe, along with clearer long-term procurement visibility. Agnikul Cosmos is preparing for the maiden orbital flight of its Agnibaan launch vehicle to place small satellites in low Earth orbit.Calling for targeted fiscal support, Suyash Singh, co-founder and CEO of GalaxEye, said, “Targeted fiscal incentives for indigenous satellite manufacturing and payload development, alongside expanded government-backed funding pools for deep-tech and space missions, can significantly de-risk early deployments.”Singh said clarity on long-term procurement, particularly for defence and strategic geospatial applications, would enable startups to plan mission-ready platforms with confidence. GalaxEye is working on Mission Drishti, a multi-sensor satellite designed for all-weather Earth imaging using optical and radar data.“Additionally, policy support for downstream commercialisation of satellite data through standardised access frameworks and incentives for data adoption can unlock wider economic value while strengthening India’s strategic and climate-monitoring capabilities,” Singh added.ISpA and Deloitte said space infrastructure plays a critical role in telecommunications, defence, navigation, finance, weather forecasting, disaster management and governance. They said formal recognition could reduce financing costs by 2–3 percentage points and strengthen national resilience.The industry body also suggested that all ministries, state governments and urban local bodies procure satellite imagery and geospatial data only from empanelled Indian companies. It proposed a geo-tagging framework for space entities and authorised users, and restrictions on access to sensitive satellite data to ensure security and regulatory compliance.Krishanu Acharya, co-founder and CEO of Suhora Technologies, said the Budget should focus on accelerating the downstream space economy, especially in converting satellite data into actionable intelligence.“With increasing adoption and demand for geospatial intelligence among the government and defence agencies, we also want to propose a specialised fund for skilling talent pipelines and academia on priority use cases,” Acharya said.He added that higher allocations for satellite data analytics in the defence sector could support intelligence, surveillance and reconnaissance (ISR), terrain monitoring and maritime domain awareness, while integrating Made-in-India private solutions into defence operations.