Regulatory hurdles and infrastructure gaps slow India’s growth in space economy: report
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A lack of a robust legal framework continues to hinder India’s progress in the global space economy, according to a new report released at the Bharat Space Conclave – 2025 in New Delhi.
The report, titled "Unlocking India's Space Economy", was jointly prepared by EY (formerly Ernst & Young) and the Federation of Indian Chambers of Commerce and Industry (FICCI). It highlights "regulatory and policy constraints" due to the absence of a comprehensive Space Activities Act, which has led to gaps in liability, insurance, and decision-making processes.
India currently holds only 2% of the global space market, approximately $8.4 billion, while China has secured 13% ($80 billion), and the U.S. leads with 40% ($250 billion).
Despite growing private sector involvement - with over 250 startups working alongside the Indian Space Research Organisation (ISRO) - India's progress remains hampered by dependency on imported space-grade components and limited launch infrastructure. Currently, all launches take place from the Satish Dhawan Space Center in Sriharikota, with a second launch facility in Tamil Nadu still years away.
Despite these challenges, the report presents an optimistic outlook, projecting India’s space economy to grow to $44 billion by 2033. Key areas of expansion include satellite communication (SATCOM), expected to reach $14.8 billion, and Earth observation and remote sensing satellites, which could contribute $8 billion. These technologies are already transforming sectors such as agriculture, disaster management, and climate resilience.
Dr. Pawan Kumar Goenka, Chairman of the Indian National Space Promotion and Authorisation Centre (InSpace), emphasised that over Rs 50,000 crore could be invested in the sector in the coming decade. He also revealed that India plans to launch 52 surveillance satellites, with 31 being built by private companies. Additionally, production of 60 units of the Launch Vehicle Mark-3 (‘Bahubali’ rocket) is in the pipeline. The government has already committed Rs 35,000 crore to ISRO for the Gaganyaan mission and the development of an Indian space station.
One of the report’s major concerns is India’s low investment in space exploration. India currently allocates only 0.07% of its GDP to the space budget, compared to 0.28% in the U.S. Despite spending four times more, the U.S. secures nearly 30 times higher returns from its space sector.
A new Space Activities Bill has been drafted to address legal and regulatory gaps, but its approval remains uncertain due to the complexities of inter-ministerial and parliamentary consultations. However, Dr. Goenka assured that no private space activities are being blocked in the absence of a formal space law.
Sharing his perspective, Pankaj Khurana, who led the study, stated, “India's space journey is no longer a distant dream; it is an unfolding reality. But ambition must be matched with action.”