India’s private space sector is skyrocketing

The anticipation is that the private sector will be able to handle end-to-end solutions in satellite manufacturing, launch vehicle manufacturing, provision of satellite services, and the production of ground systems

India's space odyssey has been in the spotlight since the momentous Chandrayaan 3 lunar landing in the Southern hemisphere of the Moon on August 23 last year.

The Indian Space Research Organisation (ISRO) achieved a historic milestone by becoming the first in the world to land near the Moon's unexplored South Pole. Subsequently, India unveiled the Chandrayaan 4 mission in 2024, intending to touch down on the far side of the Moon to retrieve lunar samples. The Aditya 1 mission launched in September is en-route to assuming a position on the halo orbit at Earth-Sun Lagrange point 1, with the primary objective of comprehending the Sun's corona. A month later, India successfully carried out the first space rocket launch as part of its upcoming orbital crewed mission, the Gaganyaan mission, which aims to send three Indian cosmonauts into space by 2025.

India announced its official space policy to develop and support its commercial space sector last April. It encourages greater participation of private players, outlining key institutions tasked with regulating the private space sector and creating a thriving ecosystem for innovation and collaboration.

According to the policy document, the Department of Space is responsible for policymaking and their implementation.

ISRO's mandate is to focus on research and development. Established in 2019, New Space India Ltd (NSIL) is pivotal in "commercialising space technologies and platforms created through public expenditure."

At the same time, the Indian National Space Promotion and Authorization Center (IN-SPACe) has been set up as a single-window agency for promoting and authorising space activities.

Nonetheless, in a substantial and impactful strategic reorientation concerning India's approach to national security in space, last year, the Indian Air Force (IAF) proposed renaming itself as the "Indian Air and Space Forces”. This proposal aligns with the broader initiative "Space Vision 2047", which seeks to enhance capabilities not only in space-based precision, navigation, timing (PNT), and intelligence, surveillance, reconnaissance (ISR) but also in the realms of space traffic management, space situational awareness, and space weather prediction. Towards this, the IAF is seeking collaboration with the public and private space sector.

Private space sector at inflection point:

Although the government had stated its intent to liberalise the space sector in June 2020, the policy in black and white came last year. It allows private players to carry out all activities in all possible verticals, from launch vehicles to communications and applications.

There are now over 200 Indian space start-ups, from what was one in 2014, while private investments nearly tripled to $ 124.7 million last year. According to government estimates, the present valuation of the Indian space economy is approximately $8.4 billion, constituting around 2-3% of the $386 billion global space economy, a share it hopes to increase to nine per cent by 2030. With the implementation of the recent policies, it is expected that the Indian space economy could reach $44 billion by the year 2033, and the market is expected to grow to $1 trillion by 2040.

The private sector is expected to play a pivotal role in attaining this projected economic figure. The anticipation is that the private sector will be able to handle end-to-end solutions in satellite manufacturing, launch vehicle manufacturing, provision of satellite services, and the production of ground systems.

Previously, many Indian investors hesitated to explore space technology due to perceived high risks. However, there is a noticeable shift as more and more companies secure increased investments, leading to a surge in new enterprises.

In June, Peak XV Partners spearheaded a $10 million investment in Digantara, a space situational awareness company specialising in space debris mapping.

Skyroot Aerospace, a launch-vehicle manufacturer, secured $51 million in funding in September, marking the sector's largest deal and led by Singapore's GIC. India holds a cost advantage, as it benefits from a large pool of highly qualified engineers, who draw lower salaries compared to their counterparts abroad. Despite these successes, additional funds are essential. The government is in the process of finalising new foreign direct investment (FDI) rules in its bid to propel India's space startups further.

(The author is a journalist, who writes on defence, strategic affairs and technology)