Indian Space Association Pushes for Key Reforms in India's Space Sector

Introduction
In a significant development for India's rapidly evolving space sector, the Indian Space Association (ISpA) has made bold proposals aimed at strengthening the financial backbone of the industry. The key highlight of their suggestions is the call for the space sector to be designated as a critical infrastructure. This move is expected to unlock numerous benefits for private space companies, facilitating further growth in this exciting domain.

The Case for Critical Infrastructure Status
One of the core recommendations by ISpA is the designation of the space sector as critical infrastructure. This would not only bring long-term advantages such as GST rebates and tax exemptions but also make it easier for satellite operators to access low-interest loans. Institutions like NABFID and IIFCL could provide the necessary financial backing, boosting the development of space projects.

This move aligns with the government’s broader vision of enhancing self-reliance under the 'Atmanirbhar Bharat' initiative. By designating space as a critical sector, India could become a leader in space technology and operations, both domestically and globally.

Expanding the Production Linked Incentive (PLI) Scheme
ISpA has also proposed extending the Production Linked Incentive (PLI) scheme to cover space-grade components. This scheme, which aims to promote domestic manufacturing, could be a game-changer for the space industry. By incentivizing the production of high-quality space components in India, the government can drive innovation and reduce the reliance on foreign imports.

GST Exemptions and Lower Borrowing Taxes
Another significant proposal is expanding GST exemptions. While satellite launch services are already GST-exempt, ISpA is pushing for this exemption to extend to key space components, including satellites, ground systems, and launch vehicles. This would reduce the cost of production, making space-related services more affordable for businesses and consumers alike.

To further ease the financial burden, ISpA is calling for a reduction in the tax rates on foreign borrowings, proposing a rate of 5%. Additionally, the withholding tax rates on satellite services could be lowered from 10% to just 2%, making it easier for service providers to operate without the burden of excessive taxes.

Government Support and Sector Growth
The Indian government’s commitment to the space sector is evident, with the establishment of the ₹1,000 crore venture capital fund for space startups. This fund is expected to become operational in the next 2-3 months, providing a much-needed financial boost to nascent companies in the space industry.

Further, the government’s interest in integrating space technology into various sectors of governance is clear. For example, the Ministry of Road Transport and Highways is piloting a satellite-based toll collection system, replacing the existing FASTag system. This is just one example of how space technology can be leveraged for greater efficiency in public administration.

Looking Ahead: The Future of India’s Space Industry
As the Indian space sector continues to grow, ISpA's recommendations could play a pivotal role in shaping its future. The push for critical infrastructure status, combined with the expansion of financial incentives and tax benefits, could make India an attractive destination for space innovation. Furthermore, with several states planning to establish space industrial parks, the private sector’s participation is expected to increase, further boosting the country’s position in the global space race.

Conclusion
In conclusion, the Indian Space Association's recommendations are a timely call for action, reflecting the rapid growth and potential of India's space sector. By implementing these reforms, the government could foster an environment conducive to innovation, entrepreneurship, and international competitiveness. The future of India’s space industry looks brighter than ever, and with the right support, it could become a global leader in space exploration and technology.

Reference from:-https://timesofindia.indiatimes.com/city/bengaluru/indian-space-assn-bats-for-key-reforms-seeks-infra-sector-status-for-space/articleshow/117427049.cms