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The Indian Space Association (ISpA) is urging the government to designate the space sector as 'critical infrastructure' in the Union Budget 2026-27 to attract investments and enhance competitiveness. This status is expected to unlock long-term financing and reduce capital costs by 2-3%.

ISpA recommends including 'space and satellite infrastructure' in the Harmonised Master List of Infrastructure, covering aspects like launch vehicles, satellite manufacturing, and ground stations. To stimulate demand, ISpA proposes a 50% government procurement mandate for space-related services and products from Indian private firms. Additional fiscal measures suggested include Production-Linked Incentive (PLI) schemes, a five-year tax holiday for space manufacturing, R&D tax credits, and regulatory reforms to facilitate industry growth and private sector participation.