On June 24, 2020, when the country was still battling the COVID-19 pandemic, the Union Cabinet approved private sector participation in space activities and the creation of the Indian National Space Promotion and Authorization Center (IN-SPACe) to provide a level playing field for private companies to utilize Indian space infrastructure.
The reform was considered a landmark in India’s space journey, which began in 1962 with the establishment of the Indian National Committee for Space Research (INCOSPAR), the earlier incarnation of the Indian Space Research Organization (ISRO).
Soon, space start-ups started growing rapidly across the country (currently, there are 330 active space startups in India). The central government made further reforms with the Indian Space Policy 2023 and opened the sector to 100% foreign investment with the new FDI policy.
More importantly, it paved the way for many states, including Karnataka, to enact their own space policies.
The Government of Karnataka, which recently approved the Karnataka Space Technology Policy 2025-30, aims to make Karnataka a global space technology destination.
This policy has two main objectives:
-
To maintain Karnataka as the number one destination for space technology in India and have 50% share in the national market, which is a $22 billion market by 2033.
-
Aiming at 5% global market share, the aim is to position Karnataka as a global space technology destination with comprehensive capabilities across the space value chain.
“The State Space Technology Policy 2025-2030 positions Karnataka as India’s leading space economy hub. Building on its unique aerospace heritage and research excellence, we are charting Karnataka’s trajectory in the rapidly growing space sector. The five strategic pillars of the policy are skill development initiatives, investment promotion, infrastructure creation, innovation and facilitation, adoption and awareness. The policy creates a rich ecosystem for space startups, industries and academic institutions, fostering innovation from the ground up.”Priyank KhargeMinister of Electronics, IT, BT and RDPR
ISRO made the way
Space and Karnataka, especially Bengaluru, are synonymous with the ISRO headquarters which was established in the city nearly five decades ago.
Many of ISRO’s important establishments such as the UR Rao Satellite Centre, ISRO Telemetry, Tracking and Command Network, Laboratory for Electro-Optics Systems and the Human Space Flight Centre, are located in Bengaluru.
Some of the leading start-ups in the sector are headquartered in Bengaluru, giving Karnataka an edge over its rivals like Tamil Nadu, Telangana, Andhra Pradesh and Gujarat, which have come up with their own space policies.
heart of the ecosystem
“Karnataka has long been the epicenter of India’s space tech ecosystem, and the new space policy is a strong step towards consolidating that leadership. It recognizes how rapidly the region is evolving, be it in satellite manufacturing, Earth observation, launches, or downstream analytics. It creates a framework that enables companies like ours to build globally competitive capabilities from India,” says Awais Ahmed, founder and CEO of Bengaluru-based startup Pixel.
He said that as a Bengaluru-based company, Pixxel has consistently benefited from the state’s depth in engineering, talent pool and innovation culture.
“The new policy creates opportunities for us to further advance satellite manufacturing, strengthen our research partnerships with institutions in the state, and foster closer collaboration with emerging startups and suppliers within the region,” Ahmed said.
He argued that the focus on high-precision manufacturing, testing infrastructure and support for emerging technologies is particularly ‘relevant to our work in hyperspectral Earth observations and planetary intelligence’. “Now with the right support mechanisms in place, we hope this will strengthen our ability to build, test and deliver high-impact space systems from Karnataka,” Ahmed said.
infrastructure needs
The infrastructure the government intends to set up through this policy includes space manufacturing parks across Karnataka, new test centers through public-private-partnership (PPP) mode to expand upstream and downstream testing capabilities and centers of excellence in partnership with industry and academia, which will be the nerve center and platform connecting industry, academia, start-ups and government to adopt and innovate space technologies.
The policy states that its focus areas will include upstream and downstream activities for commercial space, defense space, electronics and space research, including astronomy and astrophysics.
The upstream (including space and ground systems) segment also aims to cover areas such as space stations, space tourism, in-orbit services and space manufacturing activities.
The policy states, “The Government of Karnataka will support enterprises engaged in the development of next generation space capabilities, including space stations and tourism infrastructure, in-orbit manufacturing and servicing capabilities. This also includes space situational awareness systems that ensure safe and sustainable space operations.”
As per the policy, start-ups and MSMEs will be reimbursed Provident Fund (PF) or Employees’ State Insurance (ESI) at the rate of ₹1,800 per employee per month for two years, provided the total reimbursement is up to ₹12 lakh. This will be applicable to all new employment created during the policy period, provided the employment is for a continuous period of two years only.
Upskilling and Reskilling
Welcoming the initiative, Suyyash Singh, Co-Founder and CEO, GalaxyEye said that the focus on upskilling and reskilling prepares the workforce for emerging opportunities.
“Space technology demands advanced, practical expertise that goes beyond classroom learning. It is encouraging to see that the Karnataka government recognizes this as an important element in the development of human capital. Such initiatives will encourage companies to relocate here, attracted by the presence of a highly skilled talent pool. I also see PF and ESI reimbursement as a very practical measure,” he said.
“For us, this means the ability to continually develop our team, while ensuring they have opportunities to learn, adapt and stay engaged with the fast-moving nature of space technology. This is a thoughtful policy design that supports both innovation and people,” he said.
Support for 500 start-ups
The policy further states that, during the policy period, at least 500 space sector start-ups and MSMEs will be supported to grow and innovate.
“During the policy period, 50+ satellites with substantial indigenization will be designed, manufactured, assembled, integrated, tested, launched and operated by Karnataka-based NewSpace enterprises for commercial, defence-space and research purposes,” it said.
Bengaluru-based start-ups are ready to take advantage of this policy.
Yashas Karanam, co-founder and COO, Bellatrix Aerospace, said being headquartered in Bengaluru gives it a natural advantage, and the new policy expands this significantly.
“We plan to closely engage with key sectors of the state: skills, R&D collaboration, and manufacturing incentives. For example, if the proposed incentives – capital expenditure support, cluster benefits and testing infrastructure – are formalized, we are evaluating expanding our subsystem manufacturing footprint within Karnataka. Propulsion development depends on high-precision facilities. Therefore, access to state-backed test beds or shared competency centers can dramatically shorten the development cycle and cost. Can reduce,” he said.
His company intends to leverage Karnataka’s positioning efforts – space parks, cluster branding, international outreach – to increase its international customer base while increasing manufacturing locally.
take advantage of skills
The policy states that leveraging NIPUN (an initiative aimed at equipping youth in the state with industry-specific skills and harnessing their potential) and other initiatives of the Government of Karnataka, 50,000 professionals and students will be trained or skilled as per industry standards during the policy period.
This will involve at least 15,000 women professionals and students who will be trained or skilled at industry standards.
Back to the ambitious vision the policy has set for itself, which is ‘to capture 50% of India’s space market and 5% of global share by 2034.’ Is this realistic?
execution is key
Karanam says the real value of the policy will depend on implementation. His company Bellatrix Aerospace develops and manufactures advanced propulsion technologies.
“Propulsion, in particular, requires precision manufacturing, vacuum-testing infrastructure, high-fidelity qualification laboratories and predictable regulatory pathways. The framework is promising, but its impact will depend on how quickly ground-level capabilities are realised. However, the state’s ambition to capture 50% of the national space market is both practical and achievable if investment in the ecosystem is deep and sustained,” says Karanam.
Given its space history, Karnataka is certainly a leader in the space race. However, other states are catching up and start-ups see this as a positive sign.
strategic area indication
“This is a positive sign for the country. State-level policies show that India is recognizing space as a strategic sector with economic, environmental and technological importance. While ISRO and IN-SPACe continue to guide national-level priorities, states help unlock regional strengths by creating their own frameworks, be it manufacturing, innovation clusters, universities or specialized research facilities,” says Ahmed. He said that for companies like Pixxel this means creating a more distributed and flexible ecosystem.
“As long as these policies complement national goals and facilitate ease of doing business, they can collectively accelerate India’s emergence as a global space technology hub,” he said.
