Andhra Pradesh has signed investment agreements worth ₹1,800 crore for a ₹25,000 crore space city spread across the Sri Sathya Sai and Tirupati districts, aiming to build a private-sector manufacturing base 40–60 km from India’s main launch pad at Sriharikota. The deals, struck at the 31st CII Partnership Summit, cover rocket engine manufacturing, testing and propulsion research and development, and involve Astrobase Space Technologies, Bellatrix Aerospace, Agnikul Cosmos and Hathor Rockets.
The state government is positioning the cluster as an ecosystem for India’s private space technology startups and micro, small and medium enterprises rather than a collection of isolated factories. Nara Lokesh, Andhra Pradesh’s Minister for Human Resources Development, IT, Electronics and Communications, said the aim is to pull component suppliers into the same geography as rocket makers. “The State wants vertical and horizontal integration, which means bringing component suppliers for rocket makers into one ecosystem. Most of those suppliers are MSMEs,” he said.
Lokesh added that incentives alone do not build an ecosystem, and that speed is Andhra Pradesh’s edge, alongside Centres of Excellence for testing and certification.
Astrobase expands its test range
The largest of the new commitments comes from Astrobase Space Technologies, which proposed an ₹800 crore investment to expand its commercial rocket engine test facility at Thimmasamudram in Sri Sathya Sai district. The company is adding 339 acres to its existing site, taking the testing infrastructure to roughly 360 acres. The scale-up is meant to strengthen capabilities across launch vehicle development, testing and validation, with a focus on next-generation reusable launch vehicle technologies. Astrobase has promised 500 direct jobs by December 2030.
“At Astrobase, we are working towards building the capability to transport 1,000 tonnes of payload to space annually from Indian soil. We are committed to contributing to India’s space ambitions by developing advanced launch systems and building the capabilities that can position the country as a leading force in the global space transportation ecosystem. Andhra Pradesh will be an important partner in advancing this vision,” said Neeraj Khandelwal, the company’s chief executive officer, after signing the agreement.
Satellites, propulsion and orbital data centres
Bellatrix Aerospace plans an advanced programmes centre for satellites and propulsion at Lepakshi, a ₹550 crore project on 120 acres that is expected to create 565 jobs by December 2030. Chennai-based Agnikul Cosmos, which lifted off its Agnibaan SOrTeD mission in May 2024 from India’s first privately operated launchpad at Sriharikota, is planning a ₹510 crore facility for rocket launches and orbital data centre manufacturing inside the space city. “This will be one of the first such dedicated manufacturing units in Asia or Europe to build orbital data centre units,” said Srinath Ravichandran, cofounder and chief executive officer of Agnikul.
In Tirupati district, Hathor Rockets will set up rocket engine manufacturing, testing and R&D at Routhusuramala. The ₹250 crore project on 100 acres covers liquid engines for launch vehicles, in-space mobility and strategic defence, with 200 jobs promised by December 2031.
The new entrants join Skyroot Aerospace, an earlier anchor tenant at the state’s AP Space City in Tirupati, where 294.67 acres have been allotted for a ₹400 crore investment.
A short drive between engines and launches
Government officials describe the geography as unusually compact for launch vehicle work. Engines are to be built near Tirupati, tested and checked for reuse at Thimmasamudram, and propulsion systems developed at Lepakshi. “Put together, the map is compact. Engines get built near Tirupati, tested and checked for reuse at Thimmasamudram, and propulsion systems get developed at Lepakshi. All of it sits on the Hyderabad–Bengaluru corridor and within reach of Sriharikota,” one official said.
Andhra Pradesh is not alone in pursuing the opportunity. Karnataka, Tamil Nadu, Gujarat and Telangana are also developing space cities and manufacturing parks. The competition has already turned public: early this year, Andhra Pradesh and Karnataka clashed openly after Lokesh invited Pixxel cofounder Kshitij Khandelwal, who had been struggling to find land in Karnataka, to set up his unit in Andhra Pradesh. Officials in Andhra Pradesh maintain the state is well ahead of its rivals in assembling a space ecosystem.
The state was among the first in India to adopt a dedicated space policy, the Andhra Pradesh Space Policy 4.0 for 2025–30, which includes a ₹100 crore SpaceTech Fund. The Sri Sathya Sai and Tirupati cluster is intended to give rocket makers and their MSME suppliers a single base close to the launch centre that has hosted India’s marquee missions.