India is one of the world’s top spacefaring nations. It is the first Asian country to reach Mars orbit, and the fourth on the planet to take a spacecraft to the moon, landing closer to the south pole, known for its cratered terrain, than anyone else had at the time.
For decades, the global space market has been dominated by major players like the US, Europe, and China. However, a transformative force is emerging: The Indian space industry. Once a subdued participant, India’s space sector is now surging onto the global stage, challenging established giants with its cost effectiveness, agility, and vibrant private sector. The Indian Space Policy 2023, alongside ISRO and IN-SPACe, has laid a robust foundation for startups to innovate in key areas such as small rockets, multi-sensor space constellations, optical space communication, and in-orbit maintenance and manufacturing. As India looks to the future, ISRO envisions ambitious milestones, including human spaceflight, a space station, and sending an Indian to the Moon by 2040.
CONDUCIVE ENVIRONMENT
The Indian government is actively implementing policies to bolster the space sector. This includes creating a conducive environment for startups through targeted financial and nonfinancial support. ISRO has captured
a 20% global launch market share with its cost-effective launches and swift decision-making, driving a surge in private sector investment and startups. The space market is projected to reach $44 billion by 2033, reflecting a technological transformation that is set to redefine the global space industry. This rapid growth signifies a transformative shift in the space industry, with India’s current global market share of 2% to 3% set to expand to 15% by mid-century with a CAGR of 16%.
The Indian government is actively supporting this growth with several strategic initiatives. In this year’s budget, Finance Minister Nirmala Sitharaman announced the establishment of a Rs 1,000 crore venture capital (VC)
fund to support deep tech space startups. Additionally, the government has relaxed regulations to encourage private
investment, allowing 100% foreign direct investment in satellite component manufacturing without official approval
and easing rules for launch vehicles. Sitharaman also proposed the abolition of the angel tax, a levy on excess capital raised over fair market value, a much needed step which is expected to stimulate investment in the startup ecosystem.
The sector’s growth is evident in the significant increase in space startups, which have surged 200-fold in just two years. According to media reports, in the year 2023, 100 new space tech startups registered with ISRO. As of January 2024, more than 300 Indian entities have submitted 440 applications to the IN-SPACe for support. The launch of 75 space innovation challenges in October 2022 has further accelerated the growth of numerous startups. The industry also supports nearly 450 MSMEs, reflecting the vision of the Prime Minister Narendra Modi of ‘Sabka Prayas’ during the Amrit Kaal period.
Funding in the sector has been robust, with Indian spacetech startups raising approximately US$ 233 million across more than 30 deals between 2014 and May 2023. The accelerating private sector consists of several startups that are redefining entrepreneurship and achieving global recognition with their groundbreaking breakthroughs.
SOME TOP PLAYERS
In 2022, Skyroot Aerospace Pvt Ltd from Hyderabad became the first Indian private player to successfully launch a rocket with their Vikram-S suborbital launch vehicle. This milestone set the stage for a new era in India’s space exploration. Building on this momentum, Agnikul Cosmos achieved a landmark in 2024 with the launch of the
world’s first rocket equipped with a fully 3D-printed engine. This historic launch from the country’s first private launch
pad, ‘Dhanush,’ in Sriharikota, featured their Agnibaan SOrTeD rocket. The innovative single-piece 3D-printed engine
and the use of a unique gas and liquid fuel combination underscored a significant advancement in rocket technology.
Image Courtesy: Agnikul Cosmos
Hyderabad-based XDLINX, started in 2022, is fuelled by ambition and the relentless pursuit of excellence in the space technology industry. They say that they had a humble beginning but with an audacious dream, they embarked on a mission to redefine space missions. Today, XDLINX has an enthusiastic team with brilliant minds, each contributing their unique expertise to the mission. They have evolved into a force to be reckoned with in the space industry.
Image Courtesy: XDLINX
Pixxel is revolutionising satellite tech with miniaturised payloads for hyperspectral imaging, securing iDEX grants
and planning a 24-satellite constellation to serve sectors like agriculture and environmental monitoring. Saankhya
Labs contributes to one of the largest global satellite deployments, excelling in satellite technology, semiconductor
chipsets, and NavIC.
GalaxEye leads in Earth observation with India’s first private imaging satellite and drone-borne SAR, working towards
a private satellite constellation. EtherealX raised $5 million to develop engines for reusable rockets, aiming to capture
30-40% of the market with their Razor Crest Mk-1.C. OrbitAID is set to launch its first payload, competing in the $4 billion On-Orbit Servicing market.
Digantara recently opened a 25,000-square-foot facility for satellite assembly, aiming to improve space situational awareness with a constellation of surveillance satellites. Space Zone India launched Rhumi 1, India’s first hybrid
reusable rocket, setting a benchmark with its rapid deployment and return. Finally, AkashaLabdhi is developing a groundbreaking space habitat, Antariksh HAB, in collaboration with SpaceX, to support space tourism and research by 2027.
Dhruva Space, established in 2012 by Sanjay Nekkanti, is a spacetech startup based in Hyderabad. It specialises in
providing integrated solutions for space-based applications by offering satellites, earth stations, and launching services as a comprehensive package. In 2021, Dhruva became the first Indian entity to secure an order for the design and development of space-qualified solar arrays from inception. The startup claims that it stands as the sole private space-tech firm in India to possess both satellite and launcher interfaces.
Image Courtesy: Dhruva Space, Hyderabad
InspeCity, founded in 2022 by Professor Arindrajit Chowdhury and Dr Tausif Sheikh, is based in Mumbai. Incubated at IIT-Bombay, InspeCity is a satellite servicing startup that offers satellite life-enhancing and deorbiting services, positioning itself as the ‘space mechanics’. The spacetech startup is working on developing an autonomous robotic platform on top of ISRO’s polar satellite launch vehicle (PSLV) stage four’s module, the PSLV Orbital Experimental Module (POEM). This will allow InspeCity to service satellites in space and is a step towards a larger plan of building an orbital habitat around the Earth’s orbit.
SUPPORTING INDIA’S EMERGING SPACE ENTREPRENEURS
Empowering the next generation of innovators, India is laying the groundwork for a thriving space startup ecosystem with strategic programmes and initiatives aimed at nurturing entrepreneurial talent and advancing space technology.
In June, IN-SPACe launched the Pre-Incubation Entrepreneurship (PIE) Development Program, a 21-month initiative designed to guide space startups from ideation to prototype development. This programme aims to turn ambitious visions into tangible innovations.
To boost private sector participation, the Indian government has introduced tax incentives, including GST exemptions for satellite launches and income tax breaks for R&D. Additionally, initiatives like the Startup India Seed Fund, DRDO’s Technology Development Fund, iDEX, and Atal Innovation Mission are driving growth in the sector.
A substantial Rs 1000 crore corpus has been established to fund early-stage space technology startups, providing essential financing to advance innovation. GIFT City in Gandhinagar district, Gujarat, is emerging as a global hub for space tech companies, offering a favourable regulatory environment and world-class infrastructure.
Amazon Web Services (AWS) has launched its first space accelerator programme in India, selecting 24 startups for a 14-week programme with up to $100,000 in AWS credits. This initiative is in collaboration with ISRO and IN-SPACe.
The government has also abolished the angel tax, reducing the financial burden on startups and encouraging greater investment. Meanwhile, ISRO is deepening its collaboration with the private sector to enhance satellite communication, Earth observation, and space exploration capabilities.
The Space Technology Incubation Centre (STIC) at IIST (Indian Institute of Space Science and Technology, Thiruvananthapuram) has expanded its support for startups, offering advanced labs, mentorship, and funding opportunities. Additionally, several private firms, such as Ananth Technologies Ltd., are actively assisting startups with guidance on growth and scalability, and offering space for testing experimental technologies and prototypes.
These initiatives signal a new era for India’s space startups, with immense potential for growth and innovation.
Image Courtesy: Skyroot Aerospace
CHALLENGES FACED BY SPACE STARTUPS
Despite the encouraging advancements and opportunities in India’s space sector, several challenges need to be addressed in a timely manner. One of the key challenges includes limited access to substantial early-stage funding, which hampers startups’ ability to prove the feasibility of their technologies. India invests less in the space sector relative to GDP compared to other major space-faring nations. Indian startups also face limited access to substantial government grants, with only smaller grants available, impeding their ability to prove the feasibility of space technologies. To address this, there is a need for larger-scale funding initiatives, including venture debt support, tax rebates, and low-interest loans to make early-stage financing more accessible and affordable. Government procurement, a critical source of funding, should be made more accessible through transparent and robust policies. Streamlining procurement processes and supporting technology acquisition with targeted subsidies and grants will further aid startups in navigating financial and operational challenges.
Additionally, startups encounter challenges in accessing testing facilities and technology-sharing platforms. Establishing standardised test beds and simplifying regulations are crucial for easing financial and operational burdens. The GST Council’s decision to implement a 0% GST regime for spacetech startups, announced during its 50th meeting, aims to foster growth in this burgeoning sector.
Affordable public liability insurance is lacking, posing financial obstacles for startups. Advocating for legislation to provide necessary insurance coverage at reasonable costs is essential for fostering sector growth and innovation.
There is also a need for enhanced IP protection and clear standards for space technology. Increasing Indian representation in international standards and collaborating with global standards organisations can ensure that India’s technological advancements are recognised and adopted.
Further, export restrictions like ITAR, MTCR, SCOMET, etc., create operational challenges for startups. Addressing trade barriers and improving market access are necessary to enhance India’s global standing in the space sector. Additionally, supporting space technology exports and implementing productivity-linked incentives for manufacturing can help balance trade deficits and drive sector growth.
India needs to establish innovation hubs and dedicated clusters for satellite technology to facilitate collaboration among startups, research institutions, and industry players. Simplified regulatory frameworks and extended startup validity periods will support longer gestation periods and ensure equitable access to market opportunities.
FUTURE OUTLOOK
Emerging trends such as space tourism, asteroid mining, and advancements in AI and ML are set to revolutionise the space sector. The growth of space startups is expected to accelerate, significantly influencing global space exploration and commercialisation. These startups have emerged as a formidable force, driving innovation and shaping the future of space technology. As we look towards the future, upcoming missions — including Gaganyaan, NISAR, Chandrayaan-4, Bharatiya Antariksha Station, and AstroSat-2 — are anticipated to further elevate their contribution. The introduction of a deep tech startup policy will also play a crucial role in supporting these ventures. Continued support and strategic investments will be essential in advancing this dynamic industry. It is vital for stakeholders to actively support and engage with space startups to foster an environment of growth and technological advancement.
*The writer is Chairman and Managing Director, Ananth Technologies, Hyderabad, and President of Satcom Industry Association.
