Why in the News?


As per a recent study conducted by the World Economic Forum (WEF), it is projected that the worldwide space economy will attain a valuation of $1.8 trillion by the year 2035, mirroring the magnitude of the global semiconductor sector. This analysis, titled ‘Space: The $1.8 Trillion Opportunity for Global Economic Growth’, is collaboratively authored by the WEF and consulting firm McKinsey & Co.


What constitutes the Space Economy?


The space economy encompasses all economic activities related to space exploration, satellite technology, and space-enabled services. It includes sectors such as satellite communication, Earth observation, satellite navigation, space tourism, and space mining. Advancements in technology have expanded opportunities for commercial ventures in space, leading to the emergence of a thriving industry with significant economic potential.


How is the Space economy becoming so attractive?


  • Economic expansion within the space sector–  The Space Report 2022 indicates that the space economy reached a value of $469 billion in 2021, marking a 9% rise compared to the previous year. Forecasts suggest that the global space market is anticipated to surpass $1 trillion by 2040. 
  • State-supported investment– As outlined in the Space Foundation report, there has been a noticeable surge in government-supported funding for space endeavours worldwide. Specifically, there was a significant 19% increase in total government expenditure allocated towards both military and civilian space programs during the year 2021.


Factors Fueling the Global Space Economy


  • Reduction in Launch Costs: There has been a significant and rapid decline in the costs associated with launching satellites and rockets, with a tenfold decrease observed over the past two decades.


  • Affordability of Data and Connectivity: As demand for data and connectivity increases substantially, it is anticipated that prices will decrease by at least 10% by 2035, despite the surge in demand expected to reach 60%.


  • Commercial Innovations: Notably, advancements such as enhanced resolution in Earth-observation technology have led to a reduction in the cost of accessing such technologies, fostering commercial innovations.


  • Cultural Impact: Growing cultural awareness and enthusiasm surrounding space exploration are significant drivers of interest, particularly among future generations.


  • Emergence of New Space Entrepreneurship: India has witnessed the emergence of numerous startups in the space sector, focusing on providing end-to-end services in both the Business-to-Business and Business-to-Consumer segments, utilizing New Space technologies.


Condition of Space economy in India-


  • Contribution to Global Space Economy– Presently, India’s space industry constitutes approximately two percent of the worldwide space economy.India’s space sector holds the potential to achieve a valuation of $44 billion by the year 2033, representing roughly 8 per cent of the global share. According to several market surveys, the space economy has experienced an average Compound Annual Growth Rate (CAGR) of 8%.
  • Increase in Space Start-Up Activity- According to the DPIIT Start-Up India Portal, the number of space start-ups has surged from only one in 2014 to 189 in 2023.

             Investment in Indian space start-ups reached $124.7 million in 2023.

  • Growing Involvement of Private Sector: Private companies are actively engaged in exploring solutions related to satellite-based communication, as well as providing satellite integration and testing facilities. Additionally, the private sector is increasingly involved in the local manufacturing of satellite subsystems and ground systems. Prominent entities like Skyroot Aerospace, Pixxel, and Agnikul Cosmos are offering launch services and facilitating space tourism, demonstrating the expanding role of private enterprises in the space sector.
  • Rise in Satellite Launch Activity–  The Indian Space Research Organisation (ISRO) has witnessed a notable increase in the number of satellite launches. Out of the 424 foreign satellites launched by ISRO since the 1990s, more than 90% (389) were launched within the last nine years. India generated $174 million in revenue from the launch of foreign satellites.


Challenges in Advancing the Space Economy-

  • Space Debris: According to NASA, there are over 100 million pieces of space debris measuring one millimeter or larger orbiting Earth. This debris comprises non-functional spacecraft, discarded equipment, and remnants from missions, all moving at speeds of up to 17,500 miles per hour (28,160 kilometres per hour). Even minute debris poses a significant risk of damaging satellites or spacecraft.
  • Lack of Regulatory Clarity for Startups: The space startup ecosystem in India faces hurdles due to the absence of clear regulations. These startups require a supportive environment encompassing accelerators, incubators, venture capitalists, and mentors, akin to the thriving ecosystem in Bengaluru, where most New Space startups have flourished. Transforming these startups into robust industries is crucial for accelerating India’s prominence in the space sector.
  • Cybersecurity Threats: The draft National Cyber Security Strategy overlooks space security, despite concerns raised by the Data Security Council of India regarding potential cyberattacks on critical infrastructure, including space agencies.
  • Limited Share in Global Market: India’s share in the global space market is merely 2%. Over one-third of transponders utilised for Indian services are leased from foreign satellites, a proportion expected to increase with rising demand. Collaborative efforts with partners are essential for India to enhance its market share in the global space industry.


Initiatives Taken by India to Boost Space Economy-


  • Indian Space Policy, 2023: This policy facilitates the comprehensive involvement of Non-Governmental Entities (NGEs) across all facets of space endeavours.
  • Foreign Direct Investment (FDI) Regulations via Automatic Route: The policy permits up to 100 percent investment via the automatic route for the manufacture of satellite components, systems, and subsystems for various segments including satellites, ground infrastructure, and user segments. Additionally, for the complete manufacturing and operation of a satellite, up to 74 percent investment is allowed through the automatic route.
  • Foreign Direct Investment (FDI) Regulations via Government Approval Route: Investments exceeding the specified limit necessitate government approval. Presently, any foreign investment related to satellite manufacturing and operation mandates government approval under the current policy.
  • Establishment of Defense Space Agency (DSA): In 2019, India inaugurated the Defense Space Agency (DSA) alongside the Defense Space Research Organisation (DSRO). Functioning akin to a U.S. fighter command, the DSRO oversees the coordination of space assets among various military branches.The DSA, functioning as a research entity, incorporates civilian space technology into military applications.
  • Indian Space Station Project: India aims to establish the ‘Bharatiya Antariksha Station’ (Indian space station) by 2035 and intends to conduct its first lunar mission with an Indian astronaut by 2040.
  • Indian National Space Promotion and Authorization Centre (IN-SPACe)-It will serve as a centralized platform connecting the Indian Space Research Organisation (ISRO) with all entities interested in engaging in space-related endeavours or utilizing India’s space assets. Additionally, it will support, encourage, and provide guidance to private industries involved in space activities by implementing favourable policies and creating a conducive regulatory framework.
  •  Indian National Space Promotion Board– It is established to enhance the capabilities of the Department of Space and to foster the growth of private or non-governmental space entrepreneurs.
  • New Space India Limited- NSIL serves as the commercial division of the Indian Space Research Organisation (ISRO), tasked primarily with facilitating Indian industries to engage in advanced technology space-related endeavors. Additionally, NSIL is responsible for promoting and commercially leveraging the products and services generated by the space industry. 

Way Forward-

Integration of Space into National Cyber Security Strategy: It is imperative to incorporate robust cybersecurity measures into India’s national space policy, aligning it with the National Cyber Security Strategy and National Security Strategy. Implementing a Purple Revolution strategy, which includes cybersecurity exercises such as red and blue teaming under the Ministry of Defence and Home Affairs, is essential to enhance both offensive and defensive capabilities. ISRO currently combats over 100 cyberattacks daily.

Increase in Indian Space Budget: To bolster research facilities and elevate space standards, the allocation for the space budget should be raised from 0.04 per cent to a minimum of 0.5 per cent of the GDP.

Promoting Startup Initiatives: India should strategically incentivize startups to develop innovative space logistics solutions akin to the success achieved in its satellite launch program.

Download Yojna daily current affairs eng med 12th April 2024


Prelims based Question-

Q1. Consider the following statements with reference to IN-SPACE:

  1. The headquarters of IN-SPACE is in Bopal, Ahmedabad.
  2. It is an autonomous agency within the Department of Space dedicated to promoting, encouraging, and regulating space activities conducted by both government and private entities.

Choose the correct answer using the codes given below:

  1. 1 Only
  2. 2 Only
  3. Both 1 and 2
  4. Neither 1 nor 2




Mains based Question- 

Discuss the significance of opening up the Indian space sector for private participation in enhancing the diffusion of space technology and fostering the growth of the space economy. 


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