It is India’s launch into the global space economy

Space may be the final frontier, but it is governed by Earth-bound rules. A relatively recent shift in the policy and economic mindset of governments worldwide has changed our relationship with outer space. Activities that primarily fell under the orbit of government are now home to an ecosystem of enterprises that are fueling the 21^st century “space race”. By 2050, the space economy may be worth $3 trillion, and everyone wants a piece of the pie.

With a close eye on unlocking this extraterrestrial opportunity, the Indian government announced wide-scale reforms to the space sector in 2020. It has followed up those efforts with the Space Policy 2023, a vision document that outlines national efforts to increase India’s share in the global space economy.

Privatisation is a central component of this panorama; while the Indian Space Research Organisation (ISRO) operated a successful state-sponsored space programme for years, the lack of private sector involvement may have contributed to India’s limited role on the global stage.

Privatisation Shows Promise

The new policy opens up the Indian space sector to private sector entry. Non-governmental entities can undertake end-to-end space activities like operate space objects, ground-based assets and related services like satellite communications, remote sensing, navigation, etc. But will the Policy help India meet its objective of greater prominence in the space market?

The government certainly believes so. Union minister of science and technology Jitendra Singh said that “increased private industry participation will eventually result in increased contribution to the global space economy”. Markets, and investors, seem to have responded in kind.

Despite reduced funding worldwide, space startups in India received about $100 million in the past year – with the number expected to increase significantly in the coming year. A major reason for this is the greater involvement of private enterprises, lower costs of manufacturing components, promise of substantial return on investment, and technological advancement.

Trends And Growth Opportunities

The number of startups, and the functions they perform, also continue to increase. India has over 350 space companies, the fifth highest in the world. They manufacture products (launch vehicles, components, satellites) and provide services (launch services, communications, remote data sensing and analytics). In particular, the rise in demand for smaller satellites and growth in satellite based internet connectivity, adoption of new technologies such as Internet of Things and 5G has increased the demand for launch support.

Indian startups like Agnikul Cosmos and Skyroot Aerospace are working on innovations, aiming to lower cost and improve efficiency in satellite launches. Similarly, spurred by greater need for transponder capacity, the “Make in India” initiative, and insufficient INSAT capacity, satellite manufacturing offers substantial growth prospects. Smaller satellites, in contrast to larger ones, have a significant cost advantage, require less time to build and are slowly becoming the industry standard.

Downstream applications, especially in the earth observation segment, are expected to grow substantially as well. A lot of the innovation is being driven by data analytics companies that provide insights based solutions using remote sensing data. An increase in resolution of commercially available imagery and adoption of new-age technologies are some of the reasons why the remote sensing segment is likely to register a significant CAGR in 2025.

The provision of internet through satellite communications will also help bring connectivity to remote and underserved areas and meet the stated government goal of bridging the digital divide. The Policy also considers space sustainability – including the management of space debris – as a key area. Several companies are already working on advanced solutions to avoid space collisions. While the barriers to manufacturing and launching satellites have reduced, progress has also been accelerated by the integration of backbone technologies like cloud, data analytics, and blockchain. The economics of space have never been more compelling.

ISRO 2.0: New Institutional Arrangements

In addition to enabling private sector entry, the Policy provides much-needed clarity about the roles of key institutions – like the ISRO, NewSpace India Limited (NSIL), and the Indian National Space Promotion and Authorisation Center (IN-SPACe). This has been a key demand of industry and goes beyond the vision set out in the 2020 reforms. A distinct outline of how these institutions function and provide approvals resolves ambiguity and is vital for the planning of investments, operations, and service delivery.

The Policy imagines the ISRO 2.0, moving away from its role as the erstwhile manufacturer of satellites and launch vehicles to something that is more typical for a space agency. It allows the ISRO to focus solely on research and development of advanced space technologies by opening up satellite launch/manufacture of satellites, space infrastructure and services to the private sector.

ISRO will, however, continue to handhold the private sector in taking over its mantle, allowing them to leverage its decades-long infrastructure and experience. ISRO has already supported more than 150 Indian startups across a range of activities – including building and launching their rockets and also placing satellites in low-Earth orbits. Setting up these facilities and infrastructure is cost intensive and the access to ISRO’s facilities will only accelerate space innovation.

The Path Ahead

The Policy is a strong signal of intent. However, it is fundamentally a vision document, and provides little clarity on how several of its promises will be implemented. The IN-SPACe, in this regard, is entrusted with a critical role of developing guidelines to operationalise the Policy.

IN-SPACe will be tasked with bringing to life the much-awaited “single window” portal and streamline coordination with other government agencies, among other critical functions. There are other issues as well, such as a lack of clarity around the rules for foreign investment, availability of spectrum for satellite communications, and complex licensing requirements in allied sectors like telecom and broadcast.

While these are likely to be addressed in different forums, adopting a “whole-of-government” approach and applying the vision laid out in the Space Policy to these discussions may help catalyse India’s hopes of becoming a major player in today’s ‘space race’.

Vijayant Singh is Principal Associate at Ikigai Law. Views are personal and do not represent the stand of this publication.