By Prasad Gadkari & K Mukundan, Respectively Executive Director and Chief Strategy Officer & Senior Principal-Strategic Initiatives and Policy Advisory, National Investment and Infrastructure Fund

The space economy is expanding faster than at any point in its history, and India is well-positioned to participate in its next phase of growth. India combines technical capability, a large domestic demand base, and a rapidly growing private ecosystem, creating an opportunity for global capital seeking exposure to the commercialisation of space.

The government has made India’s ambition clear—to build a $44-billion space economy within the next decade, capturing roughly 8% of the global market. What lends momentum to this goal is the speed at which policy, institutions, and market mechanisms are being aligned.

The 2026 Budget reinforces this trajectory through varied instruments—a Rs 13,706-crore allocation to the Department of Space as well as a Rs 20,000-crore top-up to the Research, Development and Innovation Fund that could benefit deep-tech ventures in the sector. The government’s message is clear—commercial space is part of a broader innovation-led industrial strategy.

A quiet but significant shift is unfolding in India’s space sector—from a largely state-led programme to a broad-based industry with commercial depth and private ambition. The shift is structural, backed by policy, and increasingly attractive for capital.

India’s competitive strength lies in the long-built capabilities of its national space programme. Achievements such as the consistent performance of PSLVs/GSLVs, the Chandrayaan-3 lunar landing, and a mature earth-observation (EO) system have not just enhanced scientific reputation; they have built a tech platform that private firms can now scale commercially.

Three entities anchor India’s space sector—ISRO, focused on frontier R&D; NewSpace India Ltd, responsible for commercialising technologies; and Indian National Space Promotion and Authorisation Centre (IN-SPACe), the regulator and market enabler that authorises missions, facilitates industry engagement, and aids capital formation. The separation of functions reduces friction for private players, provides regulatory predictability, and tells investors that commercial ambition is not only permitted, but actively supported.

The ascent of any young industry depends on scaling demand for its products and services. In India’s case, with the growing usage for the private sector, government departments are also being encouraged to buy data and services from domestic space-tech firms, creating early anchor customers for the ecosystem.

Departments responsible for agriculture and water management are beginning to rely on satellite insights for crop monitoring and resource planning. Disaster response agencies are using imaging for rapid assessment; urban administrations are applying space-based analytics to traffic and mobility management; and security and public-safety agencies are incorporating persistent monitoring systems into frontline operations. These are just the early stages of potentially multi-year procurement cycles for data, analytics, and downstream applications.

India’s second dedicated spaceport for small launch vehicles—designed to support roughly 25 launches a year—will reduce bottlenecks and provide predictable access to orbit for private firms. ISRO’s 70-plus technology-transfer agreements are shortening development cycles, lowering capex requirements, and bringing new entrants to market more quickly.

India’s EO programme, structured as a public-private partnership and supported by viability gap funding, strengthens the economics of building domestic commercial constellations. India is not only developing supply-side capacity, but also creating a reliable, monetisable home market.

From a handful of startups a decade ago, India is now home to more than 250 space-tech firms, with over 15 generating revenues spanning the full spectrum of activity—from launch and satellites to propulsion, EO, and downstream analytics.

Launch startups such as Skyroot and Agnikul are redefining access to orbit; Dhruva and Bellatrix are advancing propulsion and in-orbit systems; Pixxel and Digantara are establishing themselves in high-resolution and specialised EO constellations, while SatSure and GalaxEye are building the analytics engines that convert satellite data into commercial intelligence. Together, they illustrate the technical ambition and diversity of India’s emerging space economy.

The most certain proof is in how space-tech investing has emerged alongside established segments such as fintech, consumer-tech, and healthtech. Seasoned venture capital funds have started building exposure in the sector—about $600 million has been invested so far, with ~70 companies raising institutional capital.

As activity broadens, institutional capital is beginning to deepen. The `1,500-crore Antariksh Venture Capital Fund, managed by SIDBI Venture Capital, represents India’s first dedicated institutional platform for space-tech investment, while the National Investment and Infrastructure Fund’s private-market investments and advisory engagement with IN-SPACe have contributed to a maturing ecosystem.

Rising technology readiness and economic feasibility are also beginning to draw large corporates. For instance, corporate groups such as Infosys and Tata have shown interest in an EO public-private partnership, while Infosys’ innovation fund has made an investment in Galaxeye.

The entry of corporates is expected to increase competitive intensity, accelerate technology transfer, and, most importantly, create credible exit pathways for investors through M&As and secondary transactions. This is critical for crowding in private capital and sustaining the next phase of growth in India’s space sector.

As the global space economy moves towards a projected trillion-dollar opportunity, India offers a distinctive value proposition—public-sector R&D strength, private-sector agility, competitive cost structures, and regulatory stability. Its advantages are especially strong in manufacturing, launch services, and data-driven applications—domains where reliability and cost discipline carry more weight than scale alone.

The next phase will be defined by scale—with more launches, constellations, and downstream applications—and a deepening of the investor base. For global capital, India’s space economy stands out as a strong combination of capability, clarity, and commercial momentum.

India is building a significant industry, one that could mirror the early years of renewables, telecom, and digital infrastructure. The coming decade will likely determine its global standing. For investors, the window to enter early—but not too early—is open now.

Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.