India’s space economy projected to reach $40

Growth and Investment

India’s space economy has reached $9 billion, according to latest government data, and is projected to expand to $40–45 billion over the next decade. The figures were released as the country marked National Space Day on August 23.

The sector’s expansion is attributed to a robust startup ecosystem and policy reforms. Registered space startups have risen from just one in 2014 to around 440 by August 2026. Private investment in the sector has climbed from $100.5 million in 2021–22 to $618.5 million by March 31, 2026, with $187 million recorded during 2026 alone.

According to official data, by mid-2026, 113 authorisations had been granted to 52 Non-Government Entities (NGEs), of which 18 are startups for satellite operations, payload establishment, and launch services.

Policy Reforms and Commercialisation

India opened its space sector to private participation in 2020, enabling industry and startups to engage in satellites, launch systems, and space applications. The Indian Space Policy 2023 further expanded private participation across the space value chain and defined the roles and responsibilities of NewSpace India Limited (NSIL) and the Indian National Space Promotion and Authorisation Centre (IN-SPACE).

NSIL, the commercial arm of ISRO, has seen its revenue rise from Rs 321.77 crore in FY 2021–22 to over Rs 3,000 crore in FY 2024–25, reflecting growing commercialisation. IN-SPACE has facilitated 71 ISRO technology transfers to industry and startups as of January 31, 2026.

Foreign direct investment (FDI) rules were liberalised in February 2024: up to 74% FDI is now permitted automatically for satellite manufacturing and operations, 49% for launch vehicles and spaceports, and 100% for satellite and ground-segment components.

Several financial schemes support the private ecosystem, including the IN-SPACe Seed Fund, a Rs 1,000 crore Venture Capital Fund, a Rs 500 crore Technology Adoption Fund, and a Rs 75 crore Satellite Bus as a Service (SBaaS) Scheme.

Between July 2023 and June 2026, India completed 12 launch vehicle missions, carrying 11 national satellites and nine satellites for international customers.

'Full-Stack' Ambitions

Industry experts say the next phase of India's space journey will be driven by downstream applications, private participation, and satellite-based services. Lt. Gen. AK Bhatt, Director General of the Indian Space Association (ISpA), said India is emerging as a 'full-stack' space economy, with growing strengths across launch, satellite infrastructure, and downstream space applications.

Bhatt credited the progress to a strong public-private partnership involving ISRO's technological expertise, progressive policy reforms, and the execution capabilities of a new generation of private companies. He said recent successes by private space firms send an important signal to investors and international partners.

Krishanu Acharya, CEO of Suhora, told that downstream applications could become the more sustainable growth engine, as raw satellite data becomes valuable only when converted into usable insight, a domain where downstream players will increasingly drive revenue.

Gautam Sharma, Managing Director of Viasat India, highlighted the government and ISRO's role in creating a world-class space ecosystem through public-private partnerships.

'Privatisation of Launch Vehicles'

The Centre's push to let the private sector and public sector units (PSUs) handle launch vehicle manufacturing has drawn both endorsement and caution. IN-SPACe Chairman Pawan Goenka speaking at Business Today's India @ 100 Economy Summit, said ISRO will no longer manufacture launch vehicles.

"ISRO will not make any launch vehicles and will not manufacture any launch vehicles. That will all be done by the private sector or PSU," Goenka said, as reported. ISRO is expected to progressively move away from routine manufacturing of launch vehicles and satellites to focus on research, advanced technologies, scientific missions, and infrastructure.

The first step has already been taken: the technology and production rights for the Small Satellite Launch Vehicle (SSLV) were transferred to Hindustan Aeronautics Limited (HAL) after a bidding process. Goenka said the next stage could involve the PSLV and LVM3, with production also expected to move towards privatisation.

INSPACe has transferred 120 technologies from private to the private sector, and the operator for the Rs 1,000-crore Small Satellite Launch Complex in Kulasekarapattinam could be finalised in four or five months.

'Nair Raises Concerns'

Former ISRO chairman G Madhavan Nair has questioned the viability of the privatisation move. He said industry already does 'around 90% of the work' on launch vehicles like the PSLV and GSLV, with ISRO handling final assembly, integration, testing, and launching — operations he described as critical and not to be left to 'an industry' without the necessary expertise.

Nair also asked whether private companies would be willing to invest the huge sums required to independently undertake such operations, noting that creating an ISRO-like establishment would cost around 50,000 crores, while income would be 'hardly a few thousand crores'.

He argued that the more lucrative opportunities lie in applications based on space technology, pointing out that 80% of global space business comes from applications, not from hardware manufacturing.

Nair's remarks offer a contrast to the optimistic assessment of policymakers and industry leaders, suggesting the debate over the pace and viability of privatisation but also the broader trajectory remains unresolved.