Private Investment in Space Sector

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July 26, 2022

Why in news?

Principal Scientific Adviser has stated that the government would soon come up with a new space policy to increase private sector participation in space sector.

Why is development in the space sector important?

  • The space avenue is an integration of the aerospace, IT hardware and telecom sectors.
  • Need for developing space sector
    1. To bolster connectivity and combat climate-related implications through a more secure and effective means.
    2. To provide more accurate information on weather forecasts and assess long-term trends in the climate and habitability of a region.
    3. To serve as real-time monitoring and early-warning solutions against natural disasters such as earthquakes, tsunamis, floods, wildfires, mining etc.
    4. To utilize real-time tracking for multiple purposes in defence.
    5. To reach more remote areas where conventional communication networks would require a heavy complimenting infrastructure.

The World Economic Forum had stated (2020) that satellite communication can help connect 49% of the world’s unconnected population.

Where does India stand in the global space market?

India is the sixth-largest player in the industry internationally having 3.6% of the world’s space-tech companies (as of 2021).

  • Leading players- U.S. holds the leader’s spot housing 56.4% of all companies in the space-tech ecosystem.
  • Other major players include U.K. (6.5%), Canada (5.3%), China (4.7%) and Germany (4.1%).
  • Valuation- The Indian Space Industry was valued at 7 billion dollars in 2019 and aspires to grow to 50 billion dollars by 2024.
  • Budgetary allocation- India’s total budgetary allocation for FY2022-23 towards the Department of Space was Rs. 13,700 crore.
  • Investment- As per Tracxn data, funding into the sector’s start-ups in India nearly tripled to 67.2 million dollars on a year-over-year basis in 2021.
  • U.S. and Canada were the highest receivers of space-related investment in 2021.
  • Composition- Of the 60-odd start-ups that had registered with the Indian Space Research Organisation (ISRO), a majority of them were dealing in projects related to space debris management.
  • Distinction- India holds the distinction of being the first country to have reached the Mars’ orbit in its first attempt and at $75 million which is cheaper than Western standards.
  • India’s standout feature is its cost-effectiveness.

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

  • Space reforms - In 2020, the Union government announced reforms in the space sector to provide a “level playing field” to private companies in satellites, launches and space-based services.
  • 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 (if feasible) to promote non-government private entities.
  • Role of ISRO- ISRO shares its expertise in matters pertaining to quality and reliability protocols, documentations and testing procedure through IN-SPACe’s interface mechanism.
  • NSIL- NewSpace India Ltd (NSIL), constituted in 2019, is mandated to transfer the matured technologies developed by the ISRO to Indian industries.
  • New space policy- The final version of the new space policy would soon be referred to the Empowered Technology Group for further examination.
  • Private sector’s involvement in the long term is believed to help spur investment and expertise in the realm which is capital-intensive and demands high technology.



  1. https://www.thehindu.com/business/Industry/explained-why-is-indias-space-industry-looking-for-private-sector-investment/article65682662.ece?homepage=true
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