Budget 2023: Space tech industry body calls for PLI scheme to boost manufacturing

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SatCom Industry Association of India (SIA-India), whose members include Dhruva Space, Astrogate, GalaxEye, and others, has urged the government to include a production-linked incentive (PLI) scheme for space tech players in the upcoming budget.

"PLI will not only encourage domestic manufacturers but it will also attract foreign space companies to manufacture in India. Foreign companies can establish their presence by partnering with Indian startups in order to be part of space ecosystem in India," a memorandum by SIA-India said.

The nation witnessed numerous private satellite launches in 2022, including its first private rocket launch, which attracted the attention of the subcontinent and the entire world. The industry is now hoping for increased government attention in the upcoming budget to help the sector grow even more.

The industry body stated in the memorandum that the Indian government must develop policies to create a space manufacturing platform that can keep up with global advancements.

In this regard, the SIA-India recommended the introduction of a PLI scheme for the space sector.

The industry body urged the government to introduce the scheme in the areas of critical payload manufacturing, testing facilities, and space parks.

Extending incentives and jurisdiction

Additionally, SIA-India urged the government to extend incentives or tax holidays under customs and GST provisions.

The industry body also raised the issue of object jurisdiction in space. "Since space is a global common, under existing domestic and international tax law, determining the residence of a satellite or a space activity is challenging," the SIA-India memorandum said.

In light of this, SIA-India urged the government to clarify the issue of jurisdiction in tax statutes.

"It is imperative that the question of jurisdiction to tax is specifically laid down in taxing statutes as activities that are otherwise outside the jurisdiction of India, could, for purposes of national security be treated as falling within India’s jurisdiction in other legislation," it said.

"Having a specific policy towards jurisdiction to tax within the tax enactments itself will avoid different government regulators taking contrary views on India’s jurisdiction to tax or regulate a specific space activity," the memorandum added.

GST exemption for private players

SIA-India noted that satellite launch supplies provided by ISRO, Antrix Corporation Limited, and New Space Corporation Limited are currently exempt from GST. "However, at present, such an exemption is provided only to the government organisations," the memorandum added.

The industry body requested the government to provide GST exemption for all satellite launch service providers. "This would result in creation of a level playing ground for the entire industry," the industry body said.

In-SPACE's mandate

While praising the activities of the Indian Space Promotion and Authorisation Center (In-SPACE), SIA-India pointed out that its composition, powers, functions and responsibilities are not yet defined in any legislation.

"As the full extent of commercial space activities in the country is evolving and may see disruptive innovation, In-SPACE's mandate must be defined in legislation," the industry body said.

According to SIA-India, the legislation should define the policy framework for In-SPACE to use when granting or refusing licences for commercial space activities.