India’s space economy is likely to be worth nearly $13 billion by 2025, with the satellite launch services segment set to witness the fastest growth due to increasing private participation.

About the report

• The report is released by the Indian Space Association (ISpA) and Ernst & Young.
• It says that the growing demand for smaller satellites is set to boost satellite manufacturing in the country.
• It will attract global start-ups in the sector to help incubate space tech companies to India.

Key highlights

• India’s space economy was pegged at $9.6 billion in 2020 and is expected to touch $12.8 billion by 2025.
• In dollar terms, the satellite services and applications segment would be the largest with a turnover of $4.6 billion by 2025, followed by the ground segment at $4 billion.
• Satellite manufacturing stands at $3.2 billion and launch services at $1 billion.
• The launch services segment was pegged at $600 million in 2020 and is projected to grow at a compound annual growth rate of 13 percent to reach $1 billion by 2025.

Key drivers of this demand

• India has of over 100 space tech start-ups with investments in the segment touching $68 million in 2021.
• The availability of low-cost satellite launch vehicles coupled with mass production will lead to demand from customers around the world.
• Several companies are utilising cutting-edge technologies to develop innovative launch solutions in India.

Where does India stand in the global space market?

• As per SpaceTech Analytics, India is the sixth-largest player in the industry internationally having 3.6% of the world’s space-tech companies (as of 2021).
• US holds the leader’s spot housing 56.4% of all companies in the space-tech ecosystem.
• Other major players include UK (6.5%), Canada (5.3%), China (4.7%) and Germany (4.1%).
• The Indian Space Industry was valued at $7 billion in 2019 and aspires to grow to $50 billion by 2024.

Why does India matter in the global space-tech market?

• The country’s standout feature is its cost-effectiveness.
• India holds the distinction of being the first country to have reached the Mars’ orbit in its first attempt and at $75 million — way cheaper than Western standards.

Future prospects of India’s private ‘Space’

Ans. India may lead in space junk management

• Almost 60-odd start-ups had registered with the Indian Space Research Organisation (ISRO) this year.
• A majority of them were dealing in projects related to space debris management.
• As space becomes more congested with satellites, the technology would thus help in managing ‘space junk’ (debris of old spacecraft and satellites).

How is the private sector’s involvement regulated in India?

• In June 2020, the Union government announced reforms in the space sector enabling more private players to provide end-to-end services.
• The central idea was to bring forth a predictable policy and regulatory environment for them and additionally provide access to ISRO facilities and assets to improve their capacities.

(1) Establishment of IN-SPACe

• An announcement for the establishment of the Indian National Space Promotion and Authorisation Centre (IN-SPACe) was made.
• It was mandated the task of promoting, authorising and licensing private players to carry out space activities.
• As an oversight and regulatory body, it is responsible for devising mechanisms to offer sharing of technology, expertise, and facilities free of cost to promote non-government private entities (NGPEs).
• IN-SPACe’s Monitoring and Promotion Directorate oversees NGPE’s activities as per prescribed regulations and reports back in case any corrective actions or resolutions are required.
• ISRO shares its expertise in matters pertaining to quality and reliability protocols, documentation, and testing procedure through IN-SPACe’s ‘interface mechanism’.

(2) Establishment of NSIL

• Additionally, constituted in March 2019, New Space India Ltd (NSIL), is mandated to transfer the matured technologies developed by the ISRO to Indian industries.
• All of them are under the purview of the Ministry of Defence.
• Private sector’s involvement in the long term, as with other commercial sectors, is believed to help spur investment and expertise in the realm which is capital-intensive and demands high technology.

Where does India lack?

Ans. Undisputedly, it is the finances

• The US and Canada were the highest receivers of space-related investment in 2021.
• The US’s space budget was $41 billion in 2021, $23.3 billion of which was focused on NASA.
• India’s total budgetary allocation for FY2022-23 towards the Department of Space was ₹13,700 crore ($172 million).
• Further, as per Tracxn data, funding into the sector’s start-ups (in India) nearly tripled to $67.2 million on a year-over-year basis in 2021.

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