Ahead of the Union Budget, India’s emerging private space industry has urged the government to boost spending on procuring space products and services from domestic companies and to recognise space assets as critical infrastructure to unlock long-term financing.

Industry leaders say stronger government backing as an anchor customer is vital for scaling capex-heavy space ventures. Pixxel Space founder and CEO Awais Ahmed said recent steps such as the research, development and innovation fund and the deep-tech fund were encouraging, but capital must now start flowing into businesses with the potential to make India a global force in space and artificial intelligence.

The Indian Space Association (ISpA), along with consultancy firm Deloitte, has recommended classifying space infrastructure as a distinct infrastructure sub-sector. This, they said, would enable low-cost, long-tenure financing, attract private investment and improve global competitiveness. Despite proven capabilities across satellites, launch vehicles, Earth observation data and ground systems, Indian firms face growth constraints due to the absence of assured government demand.

ISpA also pointed to global models, noting that NASA procures about 80 per cent of its systems from industry, while the European Space Agency follows an industry-led approach for nearly 90 per cent of its requirements. A formal procurement mandate in India would allow ISRO to focus on strategic and exploratory missions.

Startups such as Agnikul Cosmos and GalaxEye have called for tax rationalisation, reduced duties on specialised components, and clearer long-term procurement, particularly for defence and strategic applications. They also stressed the need for outcome-driven collaboration with ISRO and IN-SPACe.

Industry bodies further proposed that government departments procure satellite imagery only from empanelled Indian firms and strengthen frameworks for secure access to sensitive data.