Is Karnataka drawing a blueprint through its spacetech policy to dominate India’s orbit?

Karnataka, with its ambitious vision to sustain as the number one destination for space technology in India, aspires to hold 50% of India’s projected space economy, valued at USD 22 billion by 2033, while capturing at least 5% of the global market share across the space technology value chain. With a consolidated Draft- Karnataka Spacetech Policy 2024-2029, the state government has laid down a comprehensive blueprint for itself to transform the state into a global hub for commercial space activities.

Karnataka, particularly Bengaluru, has long served as India’s nerve centre for space and aerospace technologies. With institutions like ISRO’s UR Rao Satellite Centre, NewSpace India (NSIL), and a vast network of private vendors and PSUs like BHEL, HAL and NAL, the state already commands nearly 50% of the nation’s spacetech ecosystem. Start-ups in Karnataka have attracted 35% of India’s NewSpace investments, amounting to over USD 150 million, further solidifying the state’s pole position in this high-stakes domain.

Building India’s future in space

It seems the state acknowledges that spacetech demands highly specialised and interdisciplinary expertise, and the policy places significant emphasis on building India’s future space workforce. A multi-pronged approach will be undertaken to address talent creation, with measures including upskilling and reskilling support for up to 5,000 professionals, of which 1,500 will be women. MSMEs and startups will be eligible for training reimbursements of up to Rs. 10 lakh to help build internal capabilities. The state also plans to propose 60% training cost reimbursement under the Nipuna scheme, specifically for the spacetech sector. Academic partnerships with ISRO, IN-SPACe, and key universities across the state will deliver industry-aligned, certified curricula, while new space technology labs and Centres of Excellence will anchor hands-on learning and research.

And, in terms of catalysing both new investments and the expansion of existing capacities, Karnataka has designed a differentiated incentive strategy under the policy. For large-scale projects involving investments above Rs. 100 crore, tailor-made incentive packages will be crafted based on project scope and potential. For projects involving investments up to Rs. 100 crore, a range of fiscal benefits has been laid out, including 20% capital subsidies on plant and machinery, 25% land cost subsidies (up to 5 acres), 100% stamp duty and land conversion fee exemptions, and electricity duty waivers for a five-year period. Additional support such as Rs. 1 per unit power tariff reimbursement and a 50% subsidy on Effluent Treatment Plants (ETPs), up to Rs. 2.5 crore, are designed to significantly lower entry barriers for space tech entrepreneurs.

End-to-end lifecycle support

Recognising the long gestation cycles and capital-intensive nature of space ventures, the policy also introduces a suite of non-dilutive financial instruments aimed at de-risking innovation. Enterprises will be eligible for grants of up to Rs. 75 lakh for technology acquisition, research and development activities, IP registration, and testing infrastructure support. Moreover, Karnataka is offering marketing and global outreach assistance of up to Rs. 1 crore per enterprise to help local startups reach international markets. The policy even includes reimbursement of Provident Fund (PF) and ESI contributions, up to Rs. 12 lakh per enterprise, further easing early operational costs. These benefits are bolstered by Karnataka’s innovation-focused programs such as Elevate, KITVEN, and KARSEMVEN, which offer startups access to capital, mentorship, and incubation support.

But Karnataka’s vision goes beyond grants and subsidies. The policy recognises that a robust spacetech ecosystem must be underpinned by world-class infrastructure. To that end, the government plans to develop dedicated space manufacturing parks and new public-private testing centres across the state. Enterprises will also gain subsidised access to existing national facilities such as LAHARI in Mysuru and various ISRO labs. These infrastructure initiatives will be complemented by a statewide network of Technology Business Incubators (TBIs) and Centers of Excellence, which will serve as collaborative innovation hubs bringing together academia, industry, and government stakeholders.

Revenue-based incentives and ease of doing business

One of the most forward-looking aspects of the policy is its revenue-based incentive model, a first in India’s spacetech landscape. Startups and MSMEs deploying downstream space technologies such as Earth Observation (EO), Satellite Communications (SATCOM), and Positioning, Navigation & Timing (PNT) in critical sectors like agriculture, forestry, mining, and urban development will be eligible to receive 15% of their realised revenue as incentives. The caveat is that these deployments must demonstrate tangible socio-economic benefits within Karnataka, ensuring that innovation directly translates into public value.

And, to ensure seamless policy execution, the state will operationalise a Space Technology Cell under the Karnataka Innovation and Technology Society (KITS), acting as a single-window interface for enterprises. A high-powered Vision Group, comprising representatives from ISRO, IN-SPACe, DRDO, academia, and private industry, will oversee the rollout and provide strategic guidance. Detailed operational guidelines, including beneficiary eligibility and application procedures, will be released to ensure clarity, compliance, and ease of doing business.

A potential launchpad for India’s commercial space dreams

Karnataka’s Spacetech Policy 2024–2029 signals a paradigm shift in how Indian states can catalyse NewSpace growth. With robust fiscal support, skill development, and infrastructure enablement, the state is laying down a replicable blueprint for integrating innovation, industry, and impact. For India’s ambitious goal of securing 10% of the global space economy, Karnataka might just be the thrust needed to lift off.

A state that appears well on course to serve as both the launchpad and mission controller for the nation’s commercial space dreams.