top of page
  • Induqin

A $100-billion opportunity for India in space


According to a new report by the consulting firm Arthur D. Little (ADL), the global space industry is undergoing a transition from government-led programmes to a rapidly expanding private sector presence.


With the proper initiatives, India's space economy could grow from $8 billion to $100 billion by 2040, according to a report published by the American Defence League on Wednesday.


The consultancy refers to the next phase of the evolution of the space industry as Space 4.0, with the preceding three phases encompassing early astronomy, the race to the Moon, and increased international cooperation among nations, with some overlap with the new phase.


Currently, the Indian space market is expanding at a CAGR of 4.3%, exceeding the global average of 2.2%. India's space economy could reach $40 billion in 2040 if its current growth trajectory continues. However, the report contends that India's space industry could target a much higher growth rate and potentially reach $100 billion.


The "unrealized $60 billion" that can materialise in an accelerated growth scenario, according to ADL, will be the result of a policy emphasis on driving adoption of satellite-based internet connectivity that can compete with terrestrial internet, becoming a global leader in launch services, and constructing capacities in space mining, manufacturing, and in-orbit servicing.


According to ADL, success would result in a doubling of the space industry's contribution to India's GDP, from the current 0.25 percent to 0.5 percent by 2040, and the creation of more than 3 million additional employment in the country.


The report projects that India's share of the global space economy will increase to 4% between 2022 and 2040 at a compound annual growth rate (CAGR) of 9.2% if the current growth trajectory continues.


Increasing government investment in space and a boom in private sector participation, which will cater to space-market demands such as launch services and satellite services (including communication, navigation, media and entertainment, and internet connectivity), will contribute significantly to growth.


The proliferation of domestic space businesses following the recent liberalisation of the sector—with the Indian Space Research Organisation (ISRO) playing a pivotal role—serves as a barometer of how the private sector views this potential. In 2022, space startups received $112 million in funding, and of the $247 million received since 2016, $204 million, or just over four-fifths, has come in 2021 and 2022—after the establishment of the Indian National Space Promotion and Authorization Centre (INSPACe), which acts as a liaison between ISRO and private-sector space enterprises.


Despite this influx of investment, the ADL report observes that funding and technology remain significant obstacles. The government is actively contemplating revision proposals for the space sector's FDI policy.


IN-SPACe chairman Pawan Goenka stated in May that the revised FDI policy should be released "within three months," while the government had previously stated that "the specific role of IN-SPACe for channelling FDI will evolve following approval of revised FDI policy."

Brajesh Singh, associate director of ADL South Asia and India, believes that India should create a "white-list" of jurisdictions in order to attract funding and technological collaboration from other regions. "We must reconsider the global relationships we have forged in the past. A lot of changes have happened in the recent years on this”, Singh said in reply to a question at the release.


India may have earned a reputation for technological excellence on a modest budget, but China conducts ten times as many launches annually and has 500 active satellites compared to India's 50.


74 views0 comments
bottom of page