India’s Space Growth Lagging? Report Flags Key Challenges

A new report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and EY (formerly Ernst & Young) has highlighted major challenges hindering India’s space sector growth. Titled Unlocking India’s Space Economy, the report was released at the Bharat Space Conclave – 2025 in New Delhi.

One of the biggest hurdles is the lack of a comprehensive Space Activities Act, leading to regulatory and policy constraints. The report notes gaps in liability and insurance frameworks, along with multi-agency overlaps, slowing decision-making in this rapidly evolving sector.

India’s Market Share Vs. Global Competitors

Despite its strong space ambitions, India has captured only 2% of the global space market, valued at $8.4 billion. In contrast, China holds 13% ($80 billion), while the United States dominates with 40% ($250 billion).

However, an earlier government report projected that India’s space economy could grow to $44 billion by 2033, with the market estimated to be worth $1.8 trillion by 2035.

Infrastructure and Import Dependence

The report also points out India’s high dependency on imported space-grade components. Additionally, India has only one operational launch site—Satish Dhawan Space Center, Sriharikota. The upcoming Tamil Nadu launch facility is still years away from completion.

Funding Gaps and Investment Needs

Another critical issue is insufficient funding. The report notes that India invests just 0.07% of its GDP in the space sector, whereas the US spends 0.28%, resulting in nearly 30 times higher returns for America.

Dr. Pawan Kumar Goenka, Chairman of InSpace, emphasized that India’s space sector is progressing rapidly. Over the next decade, investments are expected to exceed ₹50,000 crore, including ₹35,000 crore for ISRO’s Gaganyaan and space station programs.

Emerging Opportunities and the Road Ahead

Despite these challenges, the Indian space sector is transitioning from a government-led model to a commercially driven ecosystem. The report highlights major growth areas:

• Satellite Communication (SATCOM) – Projected to reach $14.8 billion by 2033, expanding digital connectivity in rural and remote areas.
• Earth Observation & Remote Sensing – Expected to contribute $8 billion by 2033, aiding agriculture, disaster management, and climate monitoring.

A New Space Law on the Horizon?

A Space Activities Bill has been drafted, but inter-ministerial and parliamentary consultations are delaying its implementation. Despite this, Dr. Goenka assured that no activities are being stopped due to the lack of space laws.

Pankaj Khurana, who led the study, summed up the situation:

“India’s space journey is no longer a distant dream—it is an unfolding reality. But ambition must be matched with action.”

India’s space sector has immense potential, but addressing regulatory gaps, funding shortfalls, and infrastructure challenges will be key to unlocking its full economic value.