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The allocation for the space sector in Union Budget 2025-26 has increased compared to last year. The Department of Space has been allocated Rs 13,416.2 crore, up from Rs 13,042.75 crore in 2024 — a rise of 2.86 per cent. The figure is, however, lower than the Rs 13,700 crore granted in 2022-23.
The budget also removed the 5 per cent customs duty on goods “used in the building of launch vehicles and launching of satellites”.
Of the Rs 13,416.2 crore allocated, Rs 6,103.63 crore is earmarked for capital expenditure (infrastructure development and asset creation), while Rs 7,312.57 crore is set aside for revenue expenditure (day-to-day operations and maintenance).
The increase in the space budget highlighted the government’s push for space exploration and satellite technology development. It follows the success of India’s Chandrayaan-3 moon mission and the Aditya-L1 solar observation project in the past couple of years.
Even last year, in October, the Union government had approved setting up a Rs 1,000 crore Venture Capital Fund to support India’s space sector. This followed a decision in February 2024 to allow up to 100 per cent foreign direct investment under the automatic route for “manufacturing of components and systems/sub-systems for satellites, ground segments and user segments”.
Budget 2025-26 also provides an outlay of Rs 500 crore to establish a new Centre of Excellence for Artificial Intelligence (AI) in education.
“I had announced three Centres of Excellence in Artificial Intelligence for agriculture, health and sustainable cities in 2023. Now a Centre of Excellence in Artificial Intelligence for education will be set up with a total outlay of Rs 500 crore,” Finance Minister Nirmala Sitharaman said in her budget speech on February 1, 2025.
Additionally, the budget allocates Rs 2,000 crore to the IndiaAI mission — a massive 1,056 per cent increase from last year’s Rs 173 crore. Launched in April 2024 under the Union Ministry of Electronics and Information Technology, IndiaAI aims to create a “comprehensive ecosystem that fosters AI innovation” to make benefits of AI reach all strata of society.
The finance minister also announced a Rs 20,000 crore allocation for research, development and innovation. As part of this initiative, a “Deep Tech Fund of Funds” will be explored to catalyse the next generation of startups. Deep tech refers to emerging technologies such as AI, robotics and quantum computing.