India’s space economy is set to expand nearly five-fold by 2030. Growing from about $8.4 billion in 2023 to $40-45 billion now, it could potentially reach $100 billion by 2040, according to global brokerage Jefferies.
The brokerage said the country is moving away from a government-run space programme towards a commercially driven sector. It pointed to three factors behind this shift: policy reforms that opened the sector to private players, a startup ecosystem that has moved from research to commercial execution, and India’s long-standing edge in low-cost, frugal engineering.
India space policy opens sector to private companies
For nearly six decades, India’s space sector was run entirely by the state, anchored by the Indian Space Research Organisation. That changed in 2020, when the government opened the space value chain to private companies.
Since then, a full policy architecture has come up around this shift. The Indian Space Policy of 2023 allowed private participation across the entire space value chain, as per the report. A new regulator, IN-SPACe, was set up as a single-window body to approve and promote private space activity. NewSpace India, ISRO’s commercial arm, was tasked with transferring ISRO’s technology to industry and selling space products on commercial terms. It has already enabled over 70 technology-transfer agreements and launched 141 satellites for 138 international customers and three domestic ones, the report noted.
Foreign investment rules have also been eased considerably. Companies can now bring in up to 100% foreign investment automatically to manufacture satellite components. Satellite manufacturing and operations allow up to 74% through the automatic route, while launch vehicles and spaceports permit up to 49%. According to the report, anything beyond these limits needs government approval.
This liberalisation is already showing up in investment flows. IN-SPACe facilitated $150 million of investment into Indian space startups in 2025 alone.
India’s space startups expand into commercial missions
India’s space startup ecosystem has grown from a single company in 2014 to over 400 in 2026. These companies span launch vehicles, satellites, earth observation, propulsion and downstream applications, and cumulative private investment in the space has reached about $0.6 billion by FY26, as per the report.
What has changed is that many of these startups are no longer just building prototypes. They are flying missions and signing commercial contracts. Skyroot Aerospace became the first private Indian company to place a payload into orbit, with the launch of its Vikram-1 rocket in July this year. Pixxel operates a constellation of high-resolution satellites that image the Earth and has secured a commercial contract from NASA, the report noted. Agnikul Cosmos has built the world’s first rocket powered by a single-piece, 3D-printed semi-cryogenic engine. Digantara has launched a commercial space-surveillance satellite, developed a patented technology to detect orbital debris, and is now expanding into space-based missile defence.
According to the report, government schemes are also helping this shift along. A venture capital fund worth Rs 1,000 crore and a technology adoption fund worth Rs 500 crore are giving startups easier access to capital to commercialise indigenous technology.
India’s low-cost space missions give it a global edge
As per the report, the third driver is cost. India’s space missions have historically cost a fraction of what comparable missions cost in the West.
ISRO’s Mars Orbiter Mission, known as Mangalyaan, cost about $74 million to build and launch. NASA’s MAVEN mission to Mars, by comparison, had a reported lifecycle cost of over $671 million. Chandrayaan-3, which achieved the world’s first soft landing near the Moon’s south pole in 2023, cost roughly $72 million, the report said.
India’s entire space budget for FY26 stood at around $1.4 billion. That compares with NASA’s FY25 budget of $25 billion and the European Space Agency’s budget of $8.7 billion for CY25. Mission costs across countries are not always directly comparable, given differences in scope and payload complexity, but ISRO’s track record of cost-efficient execution stands out regardless.
India’s space economy targets $45 billion by 2030
Put simply, cheaper policy approvals, startups that are actually shipping products, and India’s habit of doing more with less are reasons that could propel the space sector forward. Five years ago, this was still mostly ISRO’s show. Now private money is starting to call the shots too, and going by the pace of launches and deals this year, that shift has begun picking up speed.