Context:
Recently, the Union Minister of State of Science & Technology has stated that India’s Space economy has grown to $8 billion and is projected to touch $44 billion in the next decade.
More on the News
- The government is aiming to scale the space economy to USD 44 billion by 2033 which includes USD 11 billion in exports amounting to 7-8% of the global share.
- The Indian space economy constitutes a 2% share of the global space market as of October 2024.
Overview of the Space Sector in India:
- India’s space sector is rapidly expanding, driven by technological advancements and government support, with immense potential for growth and global collaboration.
- The number of Space Start-Ups has gone up, from just 1 in 2014 to 189 in 2023 as per DPIIT Start-Up India Portal.
- The space economy in India is set to grow to US$13 billion by 2025 at a Compound Annual Growth Rate (CAGR) of 6%.
- This growth is anticipated to be driven by private sector participation, including a promising pipeline of around 250 startups currently operating across various segments of the space economy in India.
- By 2025, the satellite manufacturing segment will be the 2nd fastest-growing in the Indian space economy.
- The launch segment is fast becoming a key focus area for startups and small and medium businesses (SMEs) in India to drive the innovation agenda and to make use of new revenue opportunities.
Key Challenges for India’s Space Sector
- One of the key challenges is the need for a skilled workforce capable of driving innovation in space technologies.
- Developing a resilient space supply chain is another crucial challenge. India must establish a reliable domestic ecosystem for space component manufacturing, thereby increasing its technological independence, export potential, and competitiveness.
- The Indian space tech ecosystem also has limited seed-stage investments.
- There is no national space law, which causes confusion in terms of planning and conducting space-related business activities in the country
Government initiative to boost India’s Space economy
- The Union Cabinet, has approved the establishment of a Rs.1,000 crore Venture Capital (VC) Fund dedicated to supporting India’s space sector.
- The establishment of IN-SPACe in 2020, an agency facilitating collaboration between the government and private players to promote and oversee private sector involvement in space activities, serving as a key facilitator for space startups and businesses.
- The Union Budget 2024-25 increased the Department of Space’s annual budget by 18%.
- Currently, around 250 startups operating across various segments of the space economy in India.
- In February 2024, the Indian government allowed 100% automatic foreign direct investment (FDI) in satellite component manufacturing and satellite and user ground segments; up to 74% in satellite manufacturing and operations; and up to 49% in rockets and spaceports.