Andhra Pradesh has has unveiled a dedicated space policy aiming to attract investments of Rs 25,000 crore in the next ten years and establish two integrated space cities in Lepakshi and Tirupati. The policy, titled Space Policy 4.0, was approved by the state cabinet over the weekend, sources said.
According to the internal state cabinet presentation, the policy sets out a vision “to make Andhra Pradesh a progressive, knowledge-driven and tech-industry powered state, with space technology and related businesses as a key vertical for transformation”.
The policy outlined a target to “create 5,000 direct and 30,000 indirect, high value jobs” by 2035, while forging global partnerships in space technologies and supporting national space programmes.
Twin space cities
The state highlighted its natural advantage as being the home to India’s only operational spaceport. The policy noted that the planned third launch pad at Satish Dhawan Space Centre – Sriharikota Range gives Andhra Pradesh a central role in India’s future space missions.
The two proposed space cities—Lepakshi, about 100 km from Bengaluru, and Tirupati Space City, which will be located in Routhusurmala village in Chittoor district, about 63 km from the temple city—will focus on innovation and manufacturing, respectively. The Lepakshi cluster will serve as “India’s premier innovation hub for upstream and downstream space technologies” while the Tirupati hub will focus on “launch vehicle assembly, satellite and payload assembly, and manufacturing of mechanical systems, electronics and avionics”, according to the Andhra Pradesh Space Policy 4.0.
The state government has already earmarked 2,800 acres in Routhusurmala and 30,000 acres in Lepakshi for the development of these cities, the policy states.
Fiscal incentives
The policy provides a comprehensive incentive structure for enterprises, especially micro, small and medium enterprises (MSMEs). Investment subsidies under the Manufacturing Enterprises Development Policy (MEDP) 4.0 scheme include up to 45 percent of fixed capital investment for special category units and up to 75 percent overall support. Large and mega investments will be eligible for land cost rebates, reimbursement of state goods and services tax, and top-up on central production-linked incentive schemes. MEDP 4.0 refers to the latest version of the state's industrial policy that outlines fiscal incentives and support schemes for manufacturing enterprises, particularly MSMEs, in sectors like spacetech.
“Infrastructure development will be supported with 50 percent reimbursement of project cost, limited to INR 3 crore per lab,” the policy notes. The state will also facilitate a “direct logistics corridor with 6-lane road access to Satish Dhawan Space Centre – Sriharikota”.
Alignment with national space goals
Andhra Pradesh Space Policy is designed to support the Indian Space Research Organisation's (ISRO) national programmes including Launch Vehicle Mark-3 and the Next Generation Launch Vehicle (NGLV). “There is assured production of Launch Vehicles for the next 25 years to meet the national programs,” the presentation states.
The Tirupati space city will focus on the production and assembly of aluminium propellant tanks, semi-cryogenic engines and liquid stage integration for Launch Vehicle Mark-3 and NGLV . The policy also envisages “licensed production of other rockets for launch from India” and aims to attract firms for public-private partnerships with ISRO and NewSpace India Limited, the commercial arm of the Department of Space.
Startups will have access to a Rs 100-crore SpaceTech Fund for common infrastructure and Rs 1,000 crore venture capital fund, structured as an alternative investment fund registered with the Securities and Exchange Board of India, according to the Andhra Pradesh Space Policy 4.0.
“Space City is planned to become a one-stop shop for manufacturing components, streamlining sourcing of components… assembling launch vehicles and satellites,” the presentation added.
The policy aligns with India’s broader space roadmap that includes the Chandrayaan-4 mission by 2027, Indian space station BAS by 2035 and India’s first human mission to the Moon by 2040, it stated.
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