Space industry seeks dedicated PLI to cut imports, tax benefits

They are also seeking tax benefits, similar to the Centre’s extended tax holidays given to startups under Section 80 IAC of the Income Tax Act, in the budget. According to the pre-budget memorandum of the Satcom Industry Association of India (SIA), which was reviewed by Mint, the key demand of the industry will hinge on a PLI scheme for satellite manufacturing. “In 2020, India accounted for merely 0.61% of global exports in aircraft, spacecraft and parts, with an export value of $1.03 billion. On the other hand, India’s share in global imports in the same segments stands at 3.67%, with an import value of $5.7 billion,” said Anil Prakash, director general, SIA. “A space-based PLI scheme would help boost local manufacturing, and encourage capability building within the country,” said Awais Ahmed, chief executive at Bengaluru-based space tech startup, Pixxel.

Industry experts believe it would be advisable to optimize the existing PLI framework rather than introducing a PLI scheme for the space sector.

“The space sector is not a bulk manufacturing industry — it is mostly an assembly industry. It is unlikely that there will be sustained demand for thousands of satellites to be launched, and the numbers, at least initially, could be in the hundreds. This does not warrant a dedicated space-sector PLI scheme,” said Chaitanya Giri, consultant at policy think tank, Research and Information Systems for Developing Countries (RIS).He said the sector needs incentives for producing key components such as space-grade semiconductors, electronic equipment and sensors. Most of these are already covered in the Centre’s existing PLI framework, which includes a ₹76,000 crore semiconductor PLI introduced in 2021.