Forbes India 15th Anniversary Special

How India's space economy could hit $100 billion by 2040

A new report estimates Indian spacefaring can grow faster to hit that milestone, while an expert calls for focus on the country's own priorities

Harichandan Arakali
Published: Jul 26, 2023 02:50:58 PM IST
Updated: Jul 26, 2023 02:53:24 PM IST

How India's space economy could hit 0 billion by 2040Over the last two decades, India has launched 381 satellites for 34 countries, making it a preferred destination for satellite launches worldwide Image: Courtesy ISRO
The global space industry is undergoing an important shift, from the traditional government-led programmes to a mix of actors, led more by private companies, a new report on the sector by Arthur D Little (ADL), a multinational management consultancy, notes.
The nascent spacetech startup landscape in India, helped by the country’s liberalised space economy rules and supported by Isro, is an example of this shift. And, with the right initiatives, India could tap this shift to go from a $8 billion space economy to $100 billion by 2040, according to ADL’s report, titled ‘India in Space: A $100 billion Industry by 2040’, released today.

“The Indian government and space startup ecosystem are keen to participate in the sector’s accelerated growth and make India a major contributor to humankind’s space exploration,” Barnik Chitran Maitra, managing partner, Arthur D Little India and South Asia, writes in the report.“Isro’s ambitions and capabilities, increasing government expenditure on space, rapidly increasing investment and activity in the country’s private space sector, and government policy to increase commercial space ventures make India a very lucrative market with ample opportunities.”
The consultancy calls the next stage of evolution of the space industry Space 4.0, with the previous three phases going from early astronomy to the race to the Moon to more international cooperation among nations, some of which overlaps with the new phase.
Over the last two decades, India has launched 381 satellites for 34 countries, making it a preferred destination for satellite launches worldwide, ADL notes. For example, Isro’s rockets have recently put satellites in low earth orbits for private companies such as OneWeb that is building a satellite constellation-based internet service.
On the startup front, Indian space tech entrepreneurs are building private space launch vehicles, satellites carrying hyperspectral imaging cameras and satellite-based data services for a range of sectors from agriculture to mining. The Indian government has already invested $112 million in funding for new-age space startups in the country, according to ADL.

Also read: Chandrayaan-3: All eyes on India's moonshot

$100 billion in revenue?

The Indian space market, currently valued at $8 billion, is growing at a CAGR of 4 percent, outpacing the global average of 2 percent, according to ADL. With its strategic growth trajectory and support from the government and private sector, India's space economy could reach $40 billion by 2040.
This growth is currently being driven by India’s investments in plans for a space station, human lunar mission, and defence applications; India's affordability and proven capability in satellite/launch vehicle manufacturing, making it a favoured destination for global satellite operations; India’s space tech startup ecosystem across segments including satellite applications, ground equipment, and launch vehicles; and the adoption of commercial satellite internet by various industries.
The authors of ADL’s report argue that India could target a higher rate of growth for its space industry and potentially hit $100 billion in revenue instead of the current estimate of $40 billion.
They recommend that India encourage mass adoption of satellite internet services; aggressively exploit existing strengths in satellite/launch vehicle manufacturing and launch services; build capabilities in areas such as space mining, in-space manufacturing, in-orbit servicing, space tourism, and space entertainment; support innovation in sustainable fuel, reusable spacecraft, and eco-friendly technologies; and implement rigorous skill development programmes in space engineering, satellite technology, and applications to expand the pool of skilled scientists and engineers ready to contribute to the space sector.
India can build on existing and ongoing investments in establishing a regulatory environment that can attract more foreign investment; strengthening manufacturing capabilities, including schemes such as the production-linked incentives; more support for startups; building deeper partnerships with other space agencies and private companies; establishing dedicated R&D centres; and stepping up skill development investments.
Success would mean a doubling of the space Industry’s contribution to India’s GDP, from the current 0.25 percent to 0.5 percent by 2040 with a potential creation of more than 3 million additional jobs in the country, according to ADL.

Also read: Man can make Moon and Mars habitable planets: Mylswamy Annadurai


Indian priorities

In June, India also joined the Artemis Accords, a multilateral space initiative led by the US with the initial objective of sending humans back to the Moon.
“In the long term, sooner rather than later, India would have had to kind of hedge its bets, ensuring that we, too, would benefit from whatever comes out of deep space exploration,” Narayan Prasad, co-founder and COO of Satsearch, a space industry marketplace provider, and co-founder of Spaceport SARABHAI, an Indian space economy think tank, told Forbes India in a recent interview. “There is always going to be a strategic angle to all of this because, in the end, we should never get away from not being self-reliant.”  
Even countries like Australia that were dependent on the US for a very long time have now started creating their own space programmes, allocating their own budgets, and India, which has already done that, has a lead, he points out. “Now it's just a question of how much further we want to go. It comes down to how much Indian policymakers are willing to invest in space to either do it independently or to do it with other countries.”
China, for example has 500 active satellites today, compared to India’s 50. The Chinese have about 40 to 50 space launches a year, whereas India does it 4-5 times. And that comes down to the Chinese GDP having grown about six times to that of India, he says.
India is currently “stuck” at around Rs 10,000-12,000 crore a year in space exploration expenses, he says. However, with the growth of the economy, if the space investments’ share as a proportion of the GDP remains or is even raised a bit by the government—as India doubles its economy, space industry investments could also double to around Rs 25,000 crore—many more space missions could be funded, he says.
Prasad believes India shouldn’t be distracted by activities like space tourism. Instead, the country should bring sharp focus to those projects that will modernise India's economy as well as military—from space.
For example, India could invest more to modernise precision agriculture that uses satellite imagery, satellite positioning; reform the entire fast tag system so that toll booths can be entirely eliminated; develop applications that can combine India’s positioning NavIC receiver and payment gateways and UPI and so on.
Recalling the recent train tragedy, India could modernise the entire infrastructure of signalling the maintenance; implement real-time tracking with space links, Prasad says. “There are hundreds of examples of what we can do here on Earth before India even needs to look at Mars and Moon settlements.”
With India’s now resurgent aviation industry, “imagine having fast internet on a flight from Mumbai to Delhi” with no cellular network involved, he says. “The bad model is to copy what other countries are doing.”