No Certifying Authority, No Exemptions: Space Startups Face Bureaucratic Hurdles in Claiming Customs Relief

India’s space-tech ecosystem is on the cusp of transformative growth, driven by a new wave of startups eager to tap into the global commercial space economy. Although the government has expressed strong support for private participation in the space sector, startups are still facing a serious roadblock. In particular, due to bureaucratic ambiguity within the Department of Space (DoS), they are unable to claim crucial customs and tax exemptions on satellite components. As a result, many startups are struggling to manage costs effectively. Furthermore, the lack of a clear certification process continues to delay progress in their commercial space missions.” Would you like similar enhancements applied to the rest of the article? Would you like me to revise the rest of the paragraph for better transition usage?

At the heart of the issue is the lack of a certifying authority within the DoS to validate the eligibility of imports for exemptions under Serial Numbers 539 and 539A of the customs notification list.

The Exemptions That Exist—But Can’t Be Claimed

The Indian government has put in place customs duty and Integrated Goods and Services Tax (IGST) exemptions for a range of items used in satellite and rocket development. These exemptions are detailed under Serial Number 539, which includes satellites, payloads, and related ground testing equipment, and 539A, which covers scientific instruments, raw materials, and components required for launch vehicles and satellite missions.

However, in practice, startups argue that the absence of a clear process and a designated authority within the DoS has, consequently, made it nearly impossible for them to benefit from these provisions. Moreover, this lack of clarity continues to hinder their efforts to access much-needed cost relief.” Would you like me to review the entire section for better cohesion and transition flow?

Voices from the Industry

Startups have repeatedly flagged the issue in their communications with the government, seeking the appointment of an authorized official or team within the DoS that can certify imports and issue the necessary documentation.

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Digantara, a prominent space-tech startup focused on space situational awareness, highlighted its struggle. “Yes, we did attempt to apply for the customs duty and IGST exemptions for our satellite components under Serial Numbers 539 and 539A. As a result, we were unable to proceed with the application due to the absence of a well-defined operational process,” said Anirudh Sharma, CEO of Digantara.

Other startups echo similar frustrations. Many say that the current point of contact within the Department of Space primarily handles internal ISRO procurements and has no defined mandate or process to facilitate exemptions for private commercial missions.

A Roadblock in the New Space Age

India’s space economy is at an inflection point. The liberalization of the space sector and the creation of the Indian National Space Promotion and Authorization Center (IN-SPACe) have spurred private participation, with dozens of startups entering the field to build satellites, launch vehicles, and space-based applications.

Yet, the lack of clarity on something as fundamental as tax exemptions creates a bottleneck in the ecosystem. These exemptions, if implemented effectively, can significantly reduce costs and enable startups to allocate more resources to R&D, testing, and innovation.

“In a capital-intensive industry like space-tech, even a small reduction in import duties can have a cascading positive effect on the company’s balance sheet and growth trajectory,” noted an industry analyst.

What the Startups Are Demanding

The demand from startups is straightforward:

1. Clear Operational Guidelines: A publicly accessible and clearly defined process to apply for exemptions under 539 and 539A.
2. Designated Certifying Authority: An official or office within DoS or IN-SPACe tasked with verifying and certifying imports for commercial space missions.
3. Digital Facilitation: An online portal or integrated digital interface to streamline the application and approval process, including document submissions and status tracking.

Potential Government Response

There is growing awareness within policy circles about the hurdles facing space startups. Some experts believe that a dedicated certification cell under IN-SPACe could serve as the required authority for verifying commercial imports and issuing exemption documents.

Conclusion: An Urgent Call for Action

India’s aspirations to become a global hub for space innovation hinge on enabling and empowering its startups. While regulatory frameworks and policy announcements have set the foundation, implementation is where the real test lies.

Customs and tax exemptions are not just financial tools—they are signals of government support and ease of doing business. Without a certifying authority or defined operational pathway, the exemptions listed under 539 and 539A risk becoming hollow promises.

For India to realize its “space tech superpower” dream, these procedural gaps must be addressed urgently. The startups are ready. The question now is—will the system rise to meet them?