According to Arthur D. Little (ADL), success would result in a doubling of the space industry’s contribution to India’s GDP from its present level of 0.25% to 0.5% by 2040 and the potential creation of more than 3 million new jobs nationwide.

According to a recent analysis by consulting company ADL, the government-led initiatives that formerly dominated the global space market are giving way to a rapidly expanding private sector presence.

According to the ADL research, which was published on Wednesday, India also reflects this transition and, with the appropriate policies, could increase its space economy from $8 billion to $100 billion by 2040.

The consulting firm refers to the following stage of the space industry’s history as Space 4.0, with the preceding three stages covering early astronomy, the race to the Moon, and increased international collaboration among states, some of which overlap with the current phase.

Currently, the Indian space market is expanding faster than the 2.2% world average, at a CAGR of 4.3%. By 2040, India’s space industry, if it continues on its current development track, might be worth $40 billion. The paper contends that India may aim for and possibly reach a $100 billion space sector with a far greater growth rate.

According to ADL, a policy focus on promoting the adoption of satellite-based internet connectivity that can compete with terrestrial internet, becoming a global leader in launch services, and developing capacities in space mining, manufacturing, and in-orbit servicing will lead to the “unrealised $60 billion” that can materialise in an accelerated growth scenario.

According to ADL, success would result in a doubling of the space industry’s contribution to India’s GDP from its present level of 0.25% to 0.5% by 2040 and the potential creation of more than 3 million new jobs nationwide.

India now has a meagre 2% of the global space economy, but the research predicts that if the current development trajectory continues, it would increase to 4% during the period of 2022–2040, growing at a CAGR of 9.2%.

An important portion of the growth will come from both rising public spending on space exploration and the surge in private sector involvement, which will meet market demands for launch services and satellite services (including media and entertainment, communication, navigation, and internet connectivity).

How the private sector views this potential is measured by the emergence of local space startups following the recent opening of the industry, with the Indian Space Research Organisation (ISRO) playing a crucial role. After the government established the Indian National Space Promotion and Authorization Centre (INSPACe), which serves as a conduit between ISRO and private-sector space enterprises, space startups received $112 million in funding in 2022, and of the $247 million received since 2016, $204 million, or just over four-fifths, have come in 2021 and 2022.

The ADL research states that despite this flurry of investment, money and technology continue to be major obstacles. The proposed revisions to the FDI policy for the space industry are now being actively considered by the government.

Even though the government had earlier said that “the specific role of IN-SPACe for channelling FDI will evolve after approval of revised FDI policy,” IN-SPACe Chairman Pawan Goenka had stated in May that the revised FDI policy should be out “in three months.”

Brajesh Singh, associate director of ADL South Asia and India, thinks India should create a “white-list” of jurisdictions to accomplish this goal in terms of financial support and technological cooperation from other geographies. “The historical partnerships we have established on a worldwide scale need to be reviewed. In response to a query during the release, Singh stated that “a lot of changes have occurred in the recent years on this.”

India may have built a reputation for high-level technological proficiency on a tight budget, but rival China conducts ten times as many launches annually and has 500 operating satellites compared to India’s 50.

In recent years, the Indian space sector has witnessed a paradigm shift, propelling itself into an era of unprecedented growth. In a global space economy, which according to Morgan Stanley could be worth $1 trillion by 2040, there lies a golden $100 billion opportunity for India. This colossal sum could be realized as part of the ongoing democratization of the space sector, courtesy of the numerous private entities participating in this rapidly growing industry.

India’s journey into space started with the establishment of the Indian Space Research Organisation (ISRO) in 1969. Over the years, ISRO has accomplished significant milestones, including the Mars Orbiter Mission (MOM), the Chandrayaan-1 lunar probe, and a successful anti-satellite missile test. These achievements bear testimony to India’s technical prowess and dedication to exploring the final frontier.

Recognizing the immense potential that the private sector holds, ISRO has taken several progressive measures to foster its growth. In 2020, the Indian government announced a series of reforms, paving the way for private companies to participate in a full spectrum of space activities. These include satellite construction, launching vehicles, providing satellite-based services, and exploring space.

In the wake of these reforms, several private Indian companies have emerged to tap into the burgeoning space market. Companies like Skyroot Aerospace, Agnikul Cosmos, and Bellatrix Aerospace are working on innovative solutions like small satellite launch vehicles, ion propulsion systems, and in-orbit satellite servicing. They are not only carving out a niche for themselves but also creating an ecosystem of suppliers, manufacturers, and service providers, marking a new phase in the Indian space sector.

The Indian space industry has begun attracting significant investments from both domestic and international sources. As per a report by Invest India, a national investment promotion and facilitation agency, the Indian space sector saw an investment of $842 million between 2014 and 2020. With the ongoing privatization and the possibility of achieving the $100 billion opportunity, these figures are likely to increase manifold in the coming years.

India has established itself as a reliable partner for global space exploration missions. The successful Mars Orbiter Mission led to a significant rise in India’s collaborations with NASA, the European Space Agency (ESA), and other international bodies. These partnerships offer an excellent opportunity for India to tap into the growing international space market.

To fully realize this $100 billion opportunity, India must focus on education and skill development. The government and private sector must invest in building capacity and capability in cutting-edge technologies like artificial intelligence (AI), robotics, and quantum computing. They must also work towards creating a skilled workforce that can propel the Indian space sector to new heights.

To attract more investments and stimulate the growth of private companies, India needs to continue improving its policy framework and regulatory environment. It must foster an ecosystem that is conducive to the growth and prosperity of space startups. The creation of an independent space regulatory body could go a long way in achieving this objective.

India’s journey in space has only just begun. The $100 billion opportunity represents not just a monetary figure, but a chance to make the nation a key player in the rapidly evolving global space economy. With strategic planning, persistent effort, and a conducive environment, India could well be on its way to becoming a significant force in the realm of space exploration and technology.