Once India became the first country to land a spacecraft near the unexplored south pole of the Moon in August 2023 – and the fourth to achieve a soft landing – its space ambitions quickly expanded. Despite its status as one of the few spacefaring nations worldwide, India accounts for just 2% of the global space economy – valued at $630 billion in 2023, according to an April 2024 report by the World Economic Forum. But the Indian government has set an ambitious target of becoming a $44 billion space economy by 2033, capturing 8% of the global market, and exporting $11 billion in space products.
Historically, until the early 1990s, the Indian Space Research Organisation (ISRO) dominated India's space economy and industry, with involvement from the private sector confined to building according to ISRO specifications and plans.
Reforms and ambitious plans in the 2020s
To create a level playing field for non-governmental entities and facilitate their increased participation in end-to-end space activities, the Indian government initiated reforms in the space domain in 2020. These reforms aim to establish a robust space ecosystem by providing regulatory certainty to space operations involving various stakeholders.
Consequently, the Indian Space Policy – 2023 has been formulated as a comprehensive, dynamic, and integrated framework to implement these reforms. The primary vision of this policy is to enhance space capabilities and foster a thriving commercial presence in space, leveraging it as a catalyst for technology development. The government has also amended the foreign direct investment (FDI) policy in the space sector this year, aiming to attract increased private investment from overseas.
The involvement of private entities in the space sector has become imperative due to the disparity in the global space economy. While global companies such as SpaceX, Blue Origin, and Virgin Galactic have transformed the space sector, private sector involvement in India remains limited. However, India has outlined an ambitious 25-year plan for the space sector, which includes:
The Gaganyaan mission – launching a three-member crew to an orbit of 400 km for a three-day mission and bringing them back safely to Earth by landing in Indian sea waters;
Setting up a human space station; and
Sending an Indian to the Moon by 2040.
Apart from such projects, which are under the aegis of ISRO, there is tremendous potential for private players to meet demand from the defence sector (in remote sensing, electronics intelligence, global navigation, and communication) and civil government requirements such as weather predictions and environmental monitoring.
To facilitate greater private sector participation, several distinct, yet interconnected, entities have been established under India’s space policy:
The National Space Promotion and Authorisation Centre (In-SPACe) serves as a pivotal agency providing a single point of contact for clearance and authorisation across various activities within the space sector. These activities encompass constructing launch pads, procuring and trading satellites, and facilitating the exchange of high-resolution data. Non-government entities, including private enterprises, and government companies can access available technologies and products through this agency. Additionally, In-SPACe assumes a dual role: as a regulator, it issues guidance on liability matters, and as a promoter, it fosters the establishment of industry clusters. It also notified the Norms, Guidelines and Procedures for Implementation of Indian Space Policy-2023 in respect of Authorization of Space Activities (pdf download) in May 2024.
NewSpace India Limited (NSIL) is the commercial arm of ISRO that was set up in 2019 and tasked with overseeing the manufacturing, leasing, or procurement of space-related components, technologies, platforms, and other assets from the public and private sectors. Additionally, NSIL is responsible for commercialising space technologies and platforms that have been developed with public funds.
The Department of Space – in addition to coordinating international cooperation in global space governance and programmes alongside the Ministry of External Affairs, the Department of Space aims to provide general policy guidelines and act as the central department for implementing space technology. Moreover, it seeks to establish an effective system for resolving conflicts arising from space activities.
Foreign direct investment amendments
Amendments concerning FDI now permit 100% FDI in the space sector, aimed at attracting foreign investors. Entry routes are significantly liberalised, allowing the following percentages under listed categories.
No. | Activities | Percentage for automatic route | Percentage for government route |
1 | Manufacturing of components and systems/subsystems for satellites, ground segments, and user segments. | Up to 100% | |
2 | Satellites – manufacturing and operation, satellite data products, ground segments, and user segments. | Up to 74% | Beyond 74% |
3 | Launch vehicles and associated systems or subsystems, and the creation of spaceports for launching and receiving spacecraft. | Up to 49% | Beyond 49% |
The road ahead
Currently, India has about 60 operating satellites. In comparison, the US has close to 3,000 and China nearly 500. India is also home to more than 100 space technology startups, the majority of which have been founded in the past five years; however, despite several increases, funding (mostly early-stage) in 2023 was only $126 million (according to data intelligence firm Tracxn). A liberalised FDI regime, allied to India’s evolving space policy, should hopefully narrow such gaps and enable India to play a defining role in the global space economy.
