India is fast establishing itself as a global powerhouse in space exploration, and 2025 is poised to be a transformative year for the country’s space industry. With robust government reforms, an expanding ecosystem of startups, and significant public-private collaborations, the Indian space sector is gearing up for unprecedented growth. As the country strengthens its space capabilities, it not only seeks to advance its technological prowess but also to position itself as a leader in the global space economy.

Government Reforms: A New Era of Opportunity

India’s space industry is benefiting from a series of groundbreaking reforms and government-backed initiatives designed to unlock its full potential. One of the most pivotal changes is the recent liberalization of the Foreign Direct Investment (FDI) policy in the space sector. The new policy allows for 100% FDI under the automatic route in satellite components and systems, up to 74% for satellite manufacturing and operation, and up to 49% for launch vehicles and spaceports. These reforms have been welcomed by private players, as they open the door to international investments and advanced technologies that can catalyze further growth in India’s space economy.

Additionally, the government’s Rs 1,000 crore venture capital fund managed by IN-SPACe (Indian National Space Promotion and Authorization Center) has been a game-changer. This fund aims to support Indian startups and private sector players engaged in the development of space technologies, further fuelling innovation and entrepreneurship.

In terms of infrastructure, India has also embarked on ambitious projects such as the Phase III of the Space-Based Surveillance (SBS-III) program, which aims to launch 52 satellites for improved surveillance. Notably, 31 of these satellites will be manufactured by private industry players, providing significant opportunities for India’s burgeoning space-tech firms. Furthermore, the Prime Minister’s announcement of the construction of a second spaceport in Kulasekharapattinam, Tamil Nadu, will bolster India’s capabilities to launch missions from domestic soil, thus reducing reliance on foreign spaceports.

As Lt. Gen. AK Bhatt (Retd), Director General of the Indian Space Association (ISpA), notes, “The Indian government’s continued focus on strategic policy reforms not only opens the door for significant private sector investment but also ensures that India stays at the forefront of global space innovation.”

The Private Sector and Startups:

In recent years, the Indian space sector has witnessed a surge in private-sector involvement, with numerous startups driving innovation and technological breakthroughs. For example, in April 2024, Tata Advanced Systems Limited (TASL) and Satellogic Inc. successfully launched India’s first private sub-metric high-resolution Earth Observation satellite, marking a significant milestone for India’s commercial space endeavours. Similarly, Agnikul Cosmos, a space-tech startup, made history by launching “Agnibaan – SOrTeD,” the world’s first rocket powered by a fully 3D-printed, semi-cryogenic engine.

The growth of Indian space-tech startups has been matched by a rise in funding. In 2024 alone, Indian space-tech startups raised $76.79 million, bringing total funding to $463.24 million. This influx of capital has supported a range of innovative companies, including Pixxel, GalaxEye, Dhruva Space, and Agnikul, all of which are focused on developing cutting-edge solutions in satellite technology and space exploration.

Bhatt elaborates on the importance of this momentum: “The private space sector is witnessing a major growth in the startup ecosystem driven by favourable policy reforms. We believe this will give India access to the latest technological advances and much-needed funds from both domestic and international investors, which will fuel further innovations.”

Public-Private Partnerships:

The public-private partnership (PPP) model has emerged as a central pillar in India’s space strategy. The Indian Space Research Organisation’s (ISRO) commercial arm, NSIL, has been instrumental in enabling private firms to play a key role in India’s space missions. For instance, NSIL invited private companies to manufacture the Launch Vehicle Mark-III, which is critical to future missions, including lunar and Mars exploration. IN-SPACe has also called for bids from domestic companies to design, build, and operate Earth Observation satellites, allowing the private sector to play an integral role in national space infrastructure.

This collaborative approach aligns with India’s broader goals of becoming a global leader in space technology and applications. Bhatt comments, “The public-private partnership model is crucial in transforming India’s space sector. By combining the strengths of both public institutions and private players, India can not only boost its capabilities in satellite technology but also emerge as a global leader in applications ranging from climate monitoring to defence.”

Satellite Communications: Bridging the Digital Divide

The rapid growth of India’s satellite communication sector is another testament to the transformative potential of the space industry. The Telecommunications Act of 2023 introduced landmark reforms, including the administrative allocation of satellite spectrum, a move that will help satellite communication providers expand services across the country.

Experts anticipate that these reforms will enable the rollout of satellite-based internet in rural and underserved regions, addressing the critical issue of digital inequality.

The Road Ahead: 2025 and Beyond

Looking to 2025, the Indian space sector is on the cusp of even more significant advancements. Startups like Skyroot and Agnikul are preparing for their first orbital launches, which will mark a key milestone in the country’s private space endeavors. The Indian Space Research Organisation (ISRO) is also transferring technology for the Small Satellite Launch Vehicle (SSLV) to private players, creating a competitive environment for launch vehicle development in India.

Moreover, India’s satellite constellation is expected to expand significantly. Pixxel, for example, aims to deploy a total of 36 satellites in low Earth orbit, enhancing India’s capabilities in Earth observation and data analytics. Other sectors, such as agriculture, infrastructure, and transport, are also set to benefit from the growing availability of satellite data, which will drive innovation and efficiency across these industries.

The potential applications of space technologies are vast. For example, the Ministry of Road Transport and Highways (MoRTH) is piloting a satellite-based toll collection system that could replace the current FASTag system, bringing greater efficiency and transparency to India’s tolling infrastructure. In agriculture, satellite data has already shown its potential to improve crop management, weather forecasting, and supply chain logistics, boosting productivity and reducing costs.