Sriharikota, start-ups to space cities: Naidu govt aims for the cosmos with ambitious space policy

The Print

12 hours ago

The policy, which leverages Sriharikota's strategic location on Andhra Pradesh's southern coast, aims to attract investments worth Rs 25,000 crore in the sector over the next 10 years, and create 5,000 direct and 30,000 indirect jobs in high-technology, space-linked sectors.
The Chandrababu Naidu government's Andhra Pradesh Space Policy (4.0), unveiled Sunday, seeks to build on the country's progress and plans in satellite constellation, next-generation technology missions, planetary and interplanetary exploration, and human spaceflight and space station development.
Hyderabad: Andhra Pradesh, home to India's only operational spaceport at Sriharikota, has unveiled an ambitious space policy aimed at attracting massive investment and creating thousands of jobs in the state.
The five-year policy's strategic goals include the establishment of an enabling eco-system by developing indigenous research and testing infrastructure to reduce dependency on external agencies, and fostering international collaborations and partnerships in critical space technologies, satellite applications and launch logistics.
The policy outlines plans to build an enabling ecosystem by developing indigenous research and testing infrastructure to reduce reliance on external agencies, while promoting international collaboration in critical areas, such as space technology, satellite applications, and launch logistics.
For the purpose, the government is planning two dedicated Space Cities at Lepakshi (close to Bengaluru), and Tirupati (close to Sriharikota), to make them hubs for space tech, R&D and manufacturing.
To implement the policy, the state government will establish a dedicated Special Purpose Vehicle called Andhra Pradesh Space City Corporation, according to government orders issued Sunday.
'The corporation serves as the central agency to coordinate infrastructure development, raise startup funds, attract investments, facilitate industry partnerships, build partnerships to attract global demand and liaise with all Government of India entities for domestic demand. It will also facilitate investors to ensure streamlined execution of space-related projects,' N. Yuvaraj, the industries and commerce department secretary, said while issuing the policy.
Operating under the Department of Space, the three key organisations responsible for research, regulatory functions and commercial operations in the space sector are the Indian Space Research Organisation (ISRO), IN-SPACe (Indian National Space Promotion and Authorization Center) and the NewSpace India Limited (NSIL).
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Financial incentives
The policy offers several incentives to encourage start-ups and attract investors in the fast-expanding sector. Start-ups could get a grant of up to Rs 15 lakh in a phased manner, an interest subsidy and seed funding with equity of up to Rs 50 lakh, based on an equity sharing model.
Large enterprises are eligible for 15 percent of the eligible fixed capital investment with a maximum cap of Rs 75 crore, disbursed over three years.
Enterprises successfully entering technology transfer agreements with national or international organisations are eligible for a technology transfer subsidy and can receive 50 percent of the technology acquisition cost, up to a maximum of Rs 1 crore.
The state is offering other incentives, such as rebate on land cost, net SGST reimbursement payable on the sale of final products for five years, a de-carbonisation subsidy and stamp duty reimbursement.
However, the overall incentive claim should not exceed 100 percent of the fixed capital investment in the state.
Micro, Small and Medium Enterprises (MSMEs) can also claim these benefits, along with power subsidies, skill development assistance, branding and marketing support, although the the overall incentive claim cannot exceed 75 percent of the fixed capital investment.
Geographical advantage
Officials say Andhra Pradesh has a geographical advantage in the national space ecosystem, being home to the Satish Dhawan Space Centre at Sriharikota—India's only operational launch site.
With over 90 successful launches to date, the facility anchors the state's strategic relevance in the country's space programme.
'The development of a third launch pad at Sriharikota further reinforces Andhra Pradesh's role in supporting future strategic, commercial, and crewed space missions. Additionally, the State's proximity to key aerospace hubs such as Bengaluru and Chennai offers significant logistical and technical advantages for component sourcing, talent access, and cross-sector collaboration,' the policy says.
The Lepakshi Space City in Sri Satya Sai District (along the Hyderabad-Bengaluru Industrial Corridor) would be situated close to Bengaluru, home to the Indian Space Research Organisation's (ISRO) R&D hub and prominent aerospace clusters. The Tirupati Space City could boast of direct road access to the Satish Dhawan Space Centre (SDSC-SHAR) launch pad, facilitating efficient launch operations.
'Both locations have vast land banks available, providing ample scope for development and growth,' the policy says.
Recognising the need to target distinct sub-sectors within the space industry, the policy is categorised into two broad areas.
The first focuses on design and development, including spacecraft and payload design, avionics and embedded systems, space applications and downstream services.
The second covers manufacturing and launch logistics, such as the production and assembly of launch vehicles, propulsion systems, satellites, mechanical and precision components and support infrastructure.
India's space sector accounts for about two percent ($8-$10 billion) of the global space economy valued at over $500 billion. The policy notes that the Centre has set an ambitious target to raise this share to $44 billion by 2030.
The domestic space ecosystem comprises more than 700 firms supporting ISRO missions, in addition to over 200-250 space-focused startups that contribute to a vibrant and rapidly evolving innovation landscape.
The Indian Space Policy 2023 marks a pivotal shift by liberalising access to space technologies and infrastructure, while permitting 100 percent Foreign Direct Investment (FDI) under the automatic route for satellite component manufacturing and related services.
(Edited by Sugita Katyal)
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