With space cities, Andhra Pradesh sets course for Rs 25K cr inflows

Two space cities planned in Lepakshi and Tirupati, spanning 33,000 acres, to attract global investments and align with Centre's Rs 1.5 trillion space sector roadmap

In a sweeping push to cement its place in the global space economy, Andhra Pradesh has cleared a new policy aimed at transforming the state into a major manufacturing hub for the space sector. With an eye on attracting investments to the tune of ₹25,000 crore over the next decade, the state will establish two expansive integrated space cities in Lepakshi and Tirupati, spanning around 33,000 acres, said a senior state government official.

 

The plan comes as part of India’s broader ambition to grow its space economy to $44 billion by 2033, and aligns with the Centre’s long-term strategy, which includes a proposed ₹1.5 trillion investment in the sector by 2035. Andhra’s new blueprint — christened Space Policy 4.0 — marks one of the earliest instances of a state-level framework in the field.

 

Proximity to India’s lone spaceport, the Satish Dhawan Space Centre (SDSC) at Sriharikota, offers a logistical and strategic edge to both sites. Lepakshi, located roughly 100 kilometres from Bengaluru, is being allocated nearly 30,000 acres and sits close to the Indian Space Research Organisation’s (Isro’s) research & development (R&D) ecosystem and aerospace clusters.

 

Tirupati, meanwhile, will see the development of a space city over 2,800 acres in Routhusurmala village, Chittoor district, with direct road access to Sriharikota.

 

“Through the space policy cleared by the Cabinet, the state will encourage creation of satellite constellations, launch of remote-sensing satellites and advanced technology missions,” said the senior state official. “The state’s vision is to build a space industrial ecosystem and attract global investments. We are targeting investments to the tune of around ₹25,000 crore by 2035.” 

 

The policy package is underpinned by a set of incentives aimed at drawing both domestic and international players. For micro, small, and medium enterprises (MSMEs), the N Chandrababu Naidu government has proposed fiscal support covering up to 75 per cent of their investment.

 

Through its Manufacturing Enterprises Development Policy (MEDP) 4.0, subsidies could reach 45 per cent of fixed capital for special category units, with an upper cap of 75 per cent total support.

 

For larger bets — those ranging from ₹125 crore to over ₹500 crore — the state government will offer a suite of tailor-made incentives. These include land cost rebates, technology-transfer subsidies, state goods and services tax reimbursements, and incentives layered on top of central production-linked incentive (PLI) schemes. Mega projects above ₹500 crore will qualify for such a support package.

 

Beyond monetary incentives, the policy promises significant investment in common infrastructure. Testing facilities, integration bays for satellites and launch vehicles, quality and certification laboratories, and direct logistics corridors are among the facilities planned. The state is also targeting the creation of 5,000 direct jobs and 30,000 indirect jobs by 2035 through this space-focused industrial buildout.

 

Infrastructure development incentives will cover up to 50 per cent of project costs, including equipment expenses, capped at ₹3 crore per laboratory, intended to catalyse the setting up of critical shared testing and quality infrastructure.

 

Andhra’s move follows a wave of announcements in recent years by other states eager to stake their claim on India’s emerging space race. Telangana was the first to declare a space policy, in 2022, followed by Kerala in 2023. On April 17 this year, Gujarat rolled out a long-term space-sector strategy, prompting Tamil Nadu — whose draft policy had already been floated — to formally unveil within hours the Tamil Nadu Space Industrial Policy.