The Centre’s plan to provide incentives to space startups will be based on what a state’s space policy says and offers, Moneycontrol has learnt. States like Telangana already have a space policy, which offers a string of incentives to startups. States such as Telangana already have such as policy, which offers a string of incentives.

Addressing a gathering on the first National Space Day on August 23, Indian Space Promotion and Authorisation Centre (IN-SPACe) chairman Pawan K Goenka said the government was working with state governments to provide fiscal and non-fiscal incentives to boost manufacturing in the space sector.

The incentives would be linked to states' space tech policies, a senior government official said on condition of anonymity.

Telangana in the lead

Introduced in 2022, Telangana's space tech policy has benefitted Skyroot Aerospace and Dhruva Space startups, state's IT and industries secretary Jayesh Ranjan said.

"In line with the incentives that are laid out in our space tech policy, we have given incentives to Dhruva Space and Skyroot Aerospace to set up their manufacturing centres in Hyderabad, apart from land," Ranjan said.

"The incentives announced by IN-SPACe is part of the same structure." Both startups are based in Hyderabad.

IN-SPACe declined to comment on Moneycontrol's queries on the Centre and states’ share of incentives and other details, as the policy is awaiting final approval.

Telangana offers support to startups in the form of grants, subsidies and tax incentives. Startups can access funding and are exempt from stamp duty and other such taxes, while investors get tax breaks.

"At Dhruva Space, we benefitted from a seamless, fully online process with single-window clearance for land allocation for our new spacecraft manufacturing facility," Abhay Egoor, chief technology officer and co-founder, Dhruva Space, told Moneycontrol.

"... Additionally, the staggered payment incentive has been instrumental in accelerating our plans, with the first phase of the facility spanning 120,000 sq ft and featuring a solar array fabrication facility set to be operational within 12-18 months," he added.

Tamil Nadu has come out with a draft space policy and Karnataka is working on one, too.

Tamil Nadu wants to be a global space industry leader by developing space parks near the Kulasekarapattinam. The policy aims to attract investment and promote collaboration with multinational companies for space startups.