I vividly remember how team members in our Mumbai office were watching Chandrayaan – 3‘s landing on a big screen and cheering excitedly during the countdown.
The Chandrayaan-3 mission was such a proud moment for India, and I was super excited about it. In fact, we wrote about Chandrayaan-3 and the growth of India’s space prowess in the newsletter.
The mission marked India’s growing influence in the space sector.
However, what I find even more exciting is the evolution of the space tech landscape. Like in every other industry, technology plays an integral role and captivates the world’s imagination.
Space tech, be it in India or globally, is expanding rapidly!
This segment is no longer just for scientists or governments. It is rapidly becoming one of the most exciting fields for investors and entrepreneurs alike, impacting sectors from agriculture to telecommunications.
In this blog, we’ll explore –
- The growth of the space economy
- Major space developments around the world
- The Indian space sector and upcoming companies
- How India is poised to become a global powerhouse for space technology.
Let’s dive in.
The growth of the space economy
The global space economy is currently valued at USD 630 billion and is forecasted to expand to USD 1.8 trillion by 2035.
Now, let’s take a deeper look at the space economy.
The space economy can be divided into two parts –
- Core applications: Satellites, launch vehicles, direct services. These core applications, where revenue directly flows to space hardware and service providers, represented over 50% of the global space economy in 2023, amounting to USD 330 billion.
- Reach applications: These are sectors where space technologies enable businesses and industries to generate revenue indirectly. What we take for granted today would not exist without these space-based innovations. For instance, without the integration of satellite signals and chips in smartphones, services like Uber could not have scaled globally.
As we move further into the future, its influence on everyday life—and wealth creation—will only deepen.
Major space-tech developments across the globe
A few countries are not only leading the space race but also making great leaps in space tech.
The Indian space sector
India’s space tech sector is on a steep growth trajectory, with projections suggesting a total market opportunity exceeding USD 77 billion by 2030.
How the Indian Government is championing space tech
Our Government is playing a pivotal role in nurturing the space tech sector.
Policies such as the Indian Space Policy 2023 have been instrumental in reducing regulatory hurdles and creating an environment conducive to private enterprise:
Key policy highlights:
- Opening up core space activities: The policy allows private players to engage in space activities such as satellite launches and operations, fostering a collaborative ecosystem alongside public sector entities like ISRO and NSIL.
- Strengthening IN-SPACe: The Indian National Space Promotion and Authorisation Centre (IN-SPACe) is empowered by private entities to authorise and regulate space activities.
- Supporting innovation and entrepreneurship: Encourages private and commercial entities to invest in R&D and leverage existing infrastructure and testing facilities provided by the government.
- The strategic role of NSIL: New Space India Limited (NSIL) continues to act as a commercial arm, facilitating technology transfers and marketing ISRO’s capabilities, thus bridging the gap between research and commercialisation.
- FDI policy changes: Recent amendments to India’s FDI policy now permit up to 100% foreign direct investment in the manufacturing and procurement of satellite systems.
These changes are poised to attract greater foreign participation, boost innovation, and stimulate growth within the satellite sub-sector of India’s space industry.
Government spending
In this year’s budget, Finance Minister Nirmala Sitharaman announced the government’s eagerness to set up an INR 1,000 crore venture capital (VC) fund. During her budget speech, the Finance Minister highlighted the government’s increased focus on the space economy and private sector-driven research and innovation at the commercial scale.
Last year, the GST Council set the launchpad for spacetech startups with a 0% GST regime. During the 50th meeting of the council, the Finance Minister highlighted that the initiative was aimed at fostering emerging startups in the spacetech sector.
Private sector involvement:
India’s space tech journey has historically been dominated by ISRO, but the NewSpace era is rewriting this narrative. The opening of the space sector to private companies marks a paradigm shift, turning it into a collaborative ecosystem where public and private interests align to drive innovation.
- Last year, as many as 100 spacetech startups got registered with the Indian Space Research Organisation.
- Around 200 space tech startups are contributing to a rapidly expanding ecosystem.
These startups symbolise India’s shift towards entrepreneurship and innovation in space, tapping into the global markets with products and services that are competitive and often superior in cost-effectiveness. NewSpace India Limited (NSIL) and Indian Space Association (ISpA) are among the key organisations enabling public-private synergy, paving the way for broader private participation
We are also seeing an increased involvement of private equity investors. India’s spacetech startups have raised USD 233 million across 30+ deals between 2014 and May 2023.
Space-tech companies in India
Companies in India are doing groundbreaking work in 2 broad areas –
- Upstream: Companies developing launch vehicles and satellite systems represent foundational investments that enable further technological advancements.
- Downstream: Includes Earth observation, satellite communications, and geospatial data analytics. This segment is poised for exponential growth as industries increasingly rely on data-driven insights for strategic decisions.
Auxiliary segment: Opportunities also exist in sectors enriched by space technology, such as manufacturing, healthcare, space insurance and space-focused education and training.
The impact space tech companies are making
By leveraging satellite data and advanced space applications, India’s space tech companies are transforming many industries.
A few other areas where space tech is bringing about changes are –
- Telecommunications: Satellite communications enable access to the internet and digital services that fuel economic development. Bengaluru-based Astrome is a great example in this segment.
- Logistics and transportation: GPS and satellite data enhance route optimisation and fleet management, improving delivery efficiency and reducing costs. For instance – MapmyIndia Uses GPS and satellite data to help logistics companies improve delivery efficiency and reduce costs.
- Disaster management: Advanced satellite imaging supports early warning systems and crisis response, allowing for better resource allocation during natural disasters. Noida-based Skymet Weather is one of the prominent players in this space.
Opportunities in the Indian space-tech sector
India’s space-tech sector is brimming with potential, and capitalising on emerging opportunities will be crucial for sustained development and competitiveness.
- Public-Private Partnerships (PPP): The push for greater private sector involvement in infrastructure development and space services is a significant opportunity. Leveraging India’s strong IT sector can drive the integration of space technology across industries, fostering innovation and economic growth.
Example – OneWeb, backed by Bharti Enterprises, partnered with ISRO for satellite launches to build a global satellite internet constellation. This collaboration leverages ISRO’s PSLV and GSLV launch vehicles and strengthens India’s role in the satellite internet market by enhancing connectivity and showcasing India’s space capabilities on the world stage.
- Data analytics and aggregation: Companies that focus on data fusion and analytics, drawing insights from multiple sources, stand to benefit. Expanding cloud-based analytics capabilities could unlock new value and drive growth in the downstream sector.
Example – Blue Sky Analytics aggregates satellite data to provide real-time environmental insights, particularly on air quality and emissions. By combining satellite imagery with machine learning and cloud-based analytics, Blue Sky Analytics supports policy-making, ESG compliance, and environmental monitoring, highlighting how data-driven space applications benefit both public and private sectors.
- Diversified financial solutions: Strategies to enhance funding options include using IFSCA (International Financial Services Centres Authority) routes via GIFT City, offering tax holidays, and forming significant, collaborative investment funds. These measures aim to reduce the cost of capital and position India’s space industry globally competitive.
In summary
India’s thriving space tech industry has the potential to become a major wealth creation engine for the country. The rapid growth of this sector, driven by supportive government policies, public-private collaboration, and rising investment, presents immense opportunities for investors and entrepreneurs.
It will be interesting to see how entrepreneurs, investors, and policymakers drive meaningful change while unlocking value in the space tech space.
Disclaimer: The information contained herein is for informational purposes and should not be interpreted as soliciting, advertising, or providing any advice.