India Infrastructure Finance Company Limited (IIFCL), a state-owned infrastructure financing firm, has urged the government to classify the space sector as part of the infrastructure sector. This move would enable more private investment and innovation in the field of space technologies and services.
IIFCL’s role in space financing
According to IIFCL’s chairman, PR Jaishankar, the firm has disbursed around ₹18,000 crore in loans in FY24 and is also providing transaction advisory services to the Indian Space Research Organisation (ISRO) and its commercial arm, NewSpace India Ltd. (NSIL). He said that IIFCL, through its subsidiary IIFCL Projects Limited (IPL), is formulating a partnership framework for scaling up Launch Vehicle Mark 3 production on a public-private partnership (PPP) basis for ISRO and NSIL.
He also said that IIFCL is assisting in the transfer of 10 in-orbit communication satellites from the Department of Space, ISRO, to NSIL. These satellites are expected to enhance India’s communication capabilities and provide broadband services to rural areas.
Government’s policy reforms in space sector
Earlier this month, the government reviewed the extant foreign direct investment (FDI) policy in the space sector and allowed up to 74% FDI under the automatic route in various segments of the space sector, such as satellite manufacturing and operation, satellite data products, and ground and user segments. This decision is aimed at attracting more private players and foreign capital into the space industry, which has been largely dominated by the public sector so far.
The government has also announced the formation of Indian National Space Promotion and Authorisation Centre (IN-SPACe), a regulatory body that will facilitate and oversee the activities of private entities in the space domain.
Benefits of infrastructure status for space sector
Jaishankar said that infrastructure financing firms have an important role to play in the development of space technologies, which have immense potential for social and economic benefits. He said that by granting infrastructure status to the space sector, the government would enable easier access to long-term funding, tax incentives, and regulatory support for the projects undertaken by private players.
He also said that IIFCL plans to tap the market in FY25 with a public offer, which would help it raise more capital and expand its lending portfolio.
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