 "Space sector crucial for driving India's growth story: PM Narendra Modi")
Addressing the nation from the ramparts of the Red Fort on the 78th Independence Day on Thursday, Prime Minister Narendra Modi said that the country's space sector is going to be crucial in aiding India's growth story, and that his government has opened the sector to private players, resulting in the startup boom that the country is seeing in the sector now, hinting at more reforms.
According to industry sources, the government's policies are expected to play a key role in the sector's growth from $8.4 billion now to a targeted $44 billion by 2033. During the same time, the government is expecting an additional investment of $22 billion in the space sector, said a source aware of the development.
Industry players welcomed the steps taken by the government to boost the space sector.
Modi also said his government played a key role in removing restrictions in the sector, which resulted in the current growth. "Hundreds of startups have come up in the space sector. It is becoming vibrant. It is playing a key role in making India a strong nation. We have made many reforms in the space sector. We have liberated it from the restrictions of the past," he said.
"Earlier, our space sector was in shackles, but we have freed it. It is an opportunity for our young startups. Today we are seeing private satellites being launched. When intentions are right, we get the desired results," the PM added.
Interestingly, the number of startups in the sector has increased manifold from a mere 54 in 2020, before the creation of the Indian National Space Promotion and Authorization Center (IN-SPACe), to over 200 now. Not just that, out of a total funding of $410.79 million that the space sector received until June 2024, around 89 per cent came in the last four years.
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"The Indian space sector has undergone significant transformation in recent years, marked by key path-breaking reforms such as privatization, the introduction of a comprehensive space policy, liberal foreign direct investment (FDI) regulations, and others. These changes have laid a strong foundation for India to consolidate its position in the global space economy," said AK Bhatt, Director General, Indian Space Association (ISpA).
"We extend our heartfelt gratitude to the Indian government for its keen interest and recognition of the need for a robust space industry in India, understanding the importance of the country taking a leading role in this critical sunrise sector. With continued, unequivocal, and visionary support from the government, the private space sector is poised for exponential growth in the coming decade, driving innovation, attracting global investments, and fostering collaborations that could help position India at the forefront of space technology and exploration," he added.
Another industry source added that the FDI policy is expected to attract significant inflows in the next two-to-five years, to the tune of $4-5 billion in areas like satellite manufacturing, launch vehicles, ground segment solutions, and associated services.
Early this year, India liberalized its space sector by amending the FDI policy, which may pave the way for more foreign capital inflows in the fields of satellite development and launch, and the creation of the necessary ground infrastructure. The policy cleared by the Union Cabinet ensured 100 per cent FDI in the manufacturing of components and systems or sub-systems for satellites, ground segments, and user segments. On the other hand, 74 per cent FDI was permitted for satellite manufacturing and operation, satellite data products, and ground and user segments. Beyond 74 per cent, these activities are under the government route. In addition to this, for the development of launch vehicles and associated systems, and the creation of spaceports for launching and receiving spacecraft, FDI under the automatic route was fixed at 49 per cent.
As per the existing FDI policy, FDI is permitted in the establishment and operation of satellites only through the government approval route. In line with the vision and strategy under the Indian Space Policy 2023, the Union Cabinet has eased the FDI policy in the space sector by prescribing liberalized FDI thresholds for various sub-sectors/activities, a government statement said.
- Space Startup funding in India
| Year | Amount (in Million $) |
| Upto 2017 | $38.00 |
| 2018 | $3.08 |
| 2019 | $6.05 |
| 2020 | $22.50 |
| 2021 | $67.20 |
| 2022 | $125.72 |
| 2023 | $123.90 |
| 2024 | $24.34 |
| Total: | $410.79 |
Source: INSPACE