A lack of a solid legal framework around the governance and use of space technology remains a huge challenge as India seeks to become a frontline spacefaring nation, a new report has said.
'Unlocking India's Space Economy', released on Wednesday at the Bharat Space Conclave - 2025 in New Delhi and prepared by EY (formerly Ernst and Young) and the Federation of Indian Chambers of Commerce and Industry (FICCI) says "regulatory and policy constraints" remain as there is "no comprehensive Space Activities Act". The 50-page report highlights that there are "gaps" in liability and insurance relating to space activities in India and points to "multi agency overlaps" which could slow down decision making in this fast-changing sector.
The report also identifies other challenges hindering growth, which include "high dependency on imported space-grade components" and India's reliance on "limited launch sites" - all rocket launches take place only from the Satish Dhawan Space Center at Sriharikota and a second launch port in Tamil Nadu is still a few years away.
The document highlights that India has captured just about 2% - roughly $8.4 billion - of the global space market while China has already cornered 13% - $80 billion - and the USA remains the world leader at $250 billion and 40% of the global share.
An earlier report by the Indian government estimated that India can grow its space economy to about $44 billion by 2033. Today, there are over 250 private space startups and, alongside the Indian Space Research Organisation (ISRO), they are all trying to secure a sunny spot in the space economy, which is estimated to be worth $1.8 trillion by 2035.
Fostering Innovation
The report by FICCI and EY notes that a significant shift is underway, with India's space sector evolving from a government-led model to a commercially driven, innovation-led ecosystem. Satellite communication (SATCOM), projected to reach $14.8 billion by 2033, will play a critical role in expanding digital connectivity, particularly in rural and underserved regions. The increasing use of Earth Observation and remote sensing satellites, estimated to contribute $8 billion by 2033, is already transforming agriculture, disaster management, and climate resilience.
At the release ceremony, Dr Pawan Kumar Goenka, Chairman, Indian National Space Promotion and Authorisation Centre (InSpace), said investment in the space sector could be well above Rs 50,000 crore in the next decade or so. He highlighted that 52 surveillance satellites will be launched, with 31 to be made by the Indian private sector, and it is estimated that 60 units of the Launch Vehicle Mark-3 or the 'Bahubali' rocket will be made by India. This is in addition to the Rs 35,000 crore the government is infusing into ISRO for the Gaganyaan and Indian space station programmes. "India's space sector has moved at rocket speed," Mr Goenka emphasised.
The report also identifies the "funding gaps" and Pankaj Khurana, who led the study, said India invests just 0.07% of its GDP on its space budget compared to the US' 0.28%. So, the US spends four times more and, yet, gets nearly thirty times higher returns than India. Its economy, though, is also much bigger.
"A new space activities bill has already been drafted," Dr Goenka asserted, but said it was difficult to give a timeline because inter-ministerial and parliamentary consultation is a complex process. He also highlighted that no private sector company is being asked to take the mandatory liability insurance in the space sector. Giving an upbeat outlook, Dr Goenka added "No activity is being stopped in the absence of the space law."
Sharing his candid assessment, Mr Khurana said, "India's space journey is no longer a distant dream, it is an unfolding reality... but ambition must be matched with action."
