Budget 2024: Indian Aerospace Advocates Duty Exemptions and R&D Boost
The increasing involvement of the private sector and the flourishing startup ecosystem in India's aerospace industry has led stakeholders to request the central government to eliminate customs duties on vital materials, components, and subsystems crucial for missions. Additionally, there are appeals for the creation of dedicated funds to meet research and development needs in the interim budget for 2024-25, scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1.
"The imposition of customs duties, reaching up to 40%, poses a notable challenge for startups operating with limited budgets. This financial constraint hampers their ability to explore, learn, and refine their technologies, ultimately hindering innovation in the sector", explained Anirudh Sharma, CEO of Digantara. Despite the establishment of the Indian National Space Promotion & Authorisation Centre (IN-SPACe) and NewSpace India Ltd (NSIL) in recent years, facilitating increased private sector involvement with the Indian Space Research Organisation in a mentoring role, there are calls for additional measures to enhance collaboration between DRDO laboratories, startups, and the private industry.
"In alignment with the Indian National Space Promotion and Authorisation Centre (IN-SPACe) in space, the government should establish an independent nodal agency to facilitate collaboration between DRDO labs, startups, and the private industry in the aerospace sector", suggested Rohit Chouhan, CEO of Nabhdrishti Aerospace. Despite the unveiling of a 'Space Policy' by the government, its primary focus remains on satellite launches and related infrastructure.
Addressing the need for increased funding in research and development and the overall sector growth, Apurwa Masook, Founder and CEO of SpaceFields, emphasized, "Stakeholders and agencies should also seriously consider the spending on R&D, which has been declining as a percentage of the total expenditure. For India to emerge as a powerhouse in the aerospace and defense sector, we must be innovative, competitive, and create intellectual property value within the country. R&D spending must extend to startups, MSMEs, and academia for holistic ecosystem growth".
In the budget estimates for 2023-2024, the allocation for the Department of Space, covering central sector schemes and initiatives like the Gaganyaan space flight program, stood at Rs 12,543.9 crores. Anticipation is high among stakeholders for the upcoming financial year's budget allocation, with hopes of increased funding proving beneficial for the sector. Masook advocates for the establishment of sovereign funds that are stage-agnostic and focused on specific themes to mitigate risks in the sector.
"As aerospace engineering and manufacturing demonstrated significant growth in the last two years, the industry requires a substantial budget increase for 2024. The AatmaNirbhar Bharat Abhiyaan has been a game-changer for the industry, and we hope for policies that further fuel growth, promote competitiveness, and enhance credit access for startups and MSMEs", emphasized Pavan Ranga, Managing Director of Rangson Aerospace.