4 min read Last Updated : Aug 15 2024 | 4:00 PM IST
On Thursday, Prime Minister Narendra Modi said that the country’s space sector is going to be crucial in driving India’s growth story. His government has opened the sector to private players, resulting in the startup boom that the country is now witnessing in the space sector, hinting at more reforms.
According to industry sources, the government’s policies are expected to play a key role in the sector’s growth from $8.4 billion now to a targeted $44 billion by 2033. During the same period, the government expects an additional investment of $22 billion in the space sector, said a source aware of the development.
Industry players welcomed the steps taken by the government to boost the space sector. Addressing the nation from the Red Fort on the 78th Independence Day, Modi also said his government played a key role in removing restrictions in the sector, which resulted in the current growth. “Hundreds of startups have emerged in the space sector. It is becoming vibrant. It is playing a key role in making India a strong nation. We have made many reforms in the space sector. We have liberated it from the restrictions of the past,” he said.
“Earlier, our space sector was in shackles, but we have freed it. It is an opportunity for our young startups. Today, we are seeing private satellites being launched. When intentions are right, we get the desired results,” PM Modi added. Interestingly, the number of startups in the sector has increased manifold from a mere 54 in 2020, before the creation of the Indian National Space Promotion and Authorization Centre (IN-SPACe), to over 200 now. Not just that, out of a total funding of $410.79 million that the space sector received until June 2024, around 89 per cent came in the last four years. “The Indian space sector has undergone significant transformation in recent years, marked by key pathbreaking reforms such as privatisation, the introduction of a comprehensive space policy, liberal foreign direct investment (FDI) regulations, and others. These changes have laid a strong foundation for India to consolidate its position in the global space economy,” said AK Bhatt, Director General, Indian Space Association (ISpA).
“We extend our heartfelt gratitude to the Indian government for its keen interest and recognition of the need for a robust space industry in India, understanding the importance of the country taking a leading role in this critical sunrise sector. With continued, unequivocal, and visionary support from the government, the private space sector is poised for exponential growth in the coming decade, driving innovation, attracting global investments, and fostering collaborations that could help position India at the forefront of space technology and exploration,” he added.
Another industry source added that the FDI policy is expected to attract significant inflows in the next two to five years, to the tune of around $4-5 billion in areas like satellite manufacturing, launch vehicles, ground segment solutions, and associated services. Earlier this year, India liberalised its space sector by amending the FDI policy, which may pave the way for more foreign capital inflows in the fields of satellite development and launch, and the creation of the necessary ground infrastructure. The policy cleared by the Union Cabinet ensured 100 per cent FDI in the manufacturing of components and systems or sub-systems for satellites, ground segments, and user segments. On the other hand, 74 per cent FDI was permitted for satellite manufacturing and operation, satellite data products, and ground and user segments. Beyond 74 per cent, these activities are under the government route. In addition to this, for the development of launch vehicles and associated systems, and the creation of spaceports for launching and receiving spacecraft, FDI under the automatic route was fixed at 49 per cent.
First Published: Aug 15 2024 | 3:57 PM IST