In an effort to stimulate home manufacturing and advance R&D, India's growing commercial space industry has submitted a wish list of tax perks as well as a manufacturing incentive scheme for the 2017 Union Budget.

According to Awais Ahmed, co-founder and CEO of Bengaluru-based Pixxel, a space startup, we would like to kindly ask for a space-based production-linked incentive (PLI) strategy for space tech startups in the 2023–24 Union Budget to aid in manufacturing and encourage capability-building within the nation.

Shakuntala, a self-contained hyperspectral imaging satellite, was launched by the first Indian business, Pixxel, on a SpaceX rideshare rocket last year. It then launched 'Anand,' a secondary satellite with the same design, using an ISRO PSLV rocket. An immediate satellite network for earth observation will be established.

According to Kranthi Chand, head of the strategy and special projects at DhruvaSpace, we are requesting an additional Rs 100 crore in issue as viability gap finance (VGF) to set up new infrastructure in the Union Budget 2023–24.

Hyderabad-based startup DhruvaSpace has plans to construct a satellite production facility with a variety of uses in addition to launching two satellites on the PSLV rocket in November.

Chand further requests that the government set up Rs 1 billion specifically for the Defence Space Agency (DSA) to buy cutting-edge technologies from the market.

The necessity of various satellite and space technology projects has been approved, he continued, by the Ministry of Defence and Services headquarters (AoN).

The ideas for the tax legislation and incentives to encourage investment, R&D, and employment in the space sector were developed by the industry, according to Lieutenant General AK Bhatt (Retd), Director General of the Indian Space Association (ISpA).

According to the ISpA, a PLI programme for the space industry will support national R&D activities and offer incentives to businesses operating in the field.

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The ISpA also asks the government to provide loans, grants, and tax advantages to organisations and companies operating in the space industry.

According to Bhatt, the tax exemption for startups should continue till the current policy is published or put into force. The new space policy is nearly finished with its development.

The ISpA noted that it would be advantageous to establish parity in terms of the short-term capital gains tax rate and treatment with respect to listed and unlisted entities as well as provide an exemption from angel tax given that the majority of space-tech companies in India are startups and that access to capital is a challenge.

In addition, Bhatt wants the government to create space technology parks and assemble a team of specialists to make use of the space ecosystem.

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 According to Chand, this allocation 'minimises the revenue risk to recoup costs and delivers a financially appealing return to the private sector,' providing the much-needed incentive for the creation of cutting-edge innovations.

It was estimated that India's space sector would be worth USD 9.6 billion in 2020 and USD 12.8 billion by 2025 in research published by the ISpA and EY last year.