What the future holds for India’s space industry

Ashraf Engineer

September 9, 2023


Hello and welcome to All Indians Matter. I am Ashraf Engineer.

The successful launch of Chandrayaan-3 and the landing on the moon’s south pole was a moment of great pride and glory for India. Not only did India become a member of a tiny group of nations with such capability, it intensified the focus on our space industry. A report by the consultancy Arthur D Little said India has the potential to create a $40-$100 billion space industry by 2040 as its space budget widens, it increases the number of launch services, more private players enter the industry and the country’s satellite internet market begins to boom. As of now, India’s space industry is valued at $8 billion with a mere 2% share of the global space economy. Government spending on space is $2 billion and India has launched 381 foreign satellites since 1999 for 34 countries, netting $279 million in revenue. What’s next for India’s space industry?


The Indian Space Research Organisation, or ISRO, that launched India’s third moon mission, and demonstrated end-to-end capability in safe landing and roving on the lunar surface, is the world’s sixth largest national space agency. The launch was preceded by a major policy announcement. The Department of Space said it would share and transfer the technology of ISRO’s Small Satellite Launch Vehicle, or SSLV, to eligible Indian companies and invited applications from private players for it. This is a major boost for private sector participation in Indian space operations.

In the long-term, the industry’s eye would focus on a picture much larger than satellite internet services to satellite and launch vehicle manufacturing, space tourism and entertainment as well as space mining and in-space manufacturing.

The opportunity is massive with the global space market projected to reach $1 trillion by 2040. India, meanwhile, has only dipped a toe in it, with its space market growing at 4% in recent years – which is faster than the global average of 2%. This growth is driven by investments in an ISRO space station to be launched by 2030, a possible human lunar mission and defence applications.

This is where, it is hoped, the private sector will come in. Since 2021, it is estimated that Indian space startups have received funding of just over $200 million and there is scope for much more.

India is now home to at least 140 space technology startups. In fact, it’s one of the most sought after destinations for venture capital. These startups are building private space launch vehicles, satellites carrying sophisticated imaging equipment and satellite-based data services for sectors ranging from agriculture to mining.

India’s vendor ecosystem, meanwhile, is quite astonishing. ISRO has been doing business for decades with private vendors. This has led to the mushrooming of about 400 private firms in clusters around cities like Bengaluru, Hyderabad and Pune. They manufacture everything, from special screws to sealants. Sometimes, a hundred of them collaborate for a single launch.

India’s space journey is much talked about and we have much to be proud about. India launched its first rocket in 1963, when it was among the least developed countries in the world. The nose cone of that rocket was famously wheeled to the launchpad by bicycle. Today, the country is part of an elite club of space technology leaders.

Over the past two decades, India has become one of the most preferred destinations for satellite launches. For example, ISRO rockets have put in low-earth orbit satellites of companies such as OneWeb that is building a satellite constellation-based internet service.

Our space technology prowess is boosting foreign relations too. For instance, the US is seeking greater commercial collaboration in the area, seeing space as another sector in which India can counter-balance China.

The business of space has changed over the decades. It is now fulfilling smaller and commercial purposes too. For instance, imaging systems feed information about the planet to terrestrial stations, helping farmers insure their crops or commercial fishing fleets track their catch. Satellites are bringing phone networks to remote areas and helping to operate solar farms.

ISRO, on its part, has done all the right things. Its spaceport at Sriharikota is near the Equator and ideal for launches. Its rocket is considered among the most reliable and has a success rate of 95%. It has halved the cost of insurance for a satellite, which in turn makes India one of the world’s most cost-effective launch sites.

There is geopolitics at work too. Historically, Russia and China offered low-cost options for launches but the Ukraine invasion has meant that Russia is no longer on the radar. As far as China is concerned, the US would more likely approve an American company sending military-grade technology through India.

The Arthur D Little report recommends that India encourage mass adoption of satellite internet services, build capabilities in areas such as in-orbit servicing and support innovation in sustainable fuel and reusable spacecraft. It can put in top gear skill development programmes in areas such as space engineering and satellite technology to expand the pool of scientists and engineers.

India needs also to create a regulatory environment, strengthening manufacturing capabilities through routes such as production-linked incentives, closer partnerships with other space agencies and dedicated R&D centres for space technology.

Other areas of investment could include precision agriculture that uses satellite imagery, satellite positioning, using satellites to reform the Fast Tag system so that toll booths can be eliminated, payment gateways and more. Satellite technology can be used also to make train journeys safer through better signalling and real-time tracking.

India certainly has the tools, the capability and the track record. By boosting the private sector’s role, the stage has been set for an even greater transformation of the space industry.

Thank you all for listening. Please visit allindiansmatter.in for more columns and audio podcasts. You can follow me on Twitter at @AshrafEngineer and @AllIndiansCount. Search for the All Indians Matter page on Facebook. On Instagram, the handle is @AllIndiansMatter. Email me at editor@allindiansmatter.in. Catch you again soon.