India’s Space Industry on Track to Reach $100 Billion by 2040, Creating 3 Million Jobs
India’s space industry is poised for significant growth, with the potential to reach a value of $100 billion by 2040. This expansion is expected to create over 3 million new jobs nationwide, according to a recent analysis conducted by consulting firm Arthur D. Little (ADL).
The research suggests that India’s space economy could increase from its current worth of $8 billion to $100 billion by 2040, driven by government-led initiatives and a rapidly expanding private sector presence. ADL refers to this phase as Space 4.0, marking a transition from previous stages that encompassed early astronomy, the race to the Moon, and increased international collaboration.
India’s space market is experiencing faster growth than the global average, with a compound annual growth rate (CAGR) of 4.3%. If this trajectory continues, India’s space industry could reach $40 billion by 2040. However, ADL contends that with the right policies in place, India has the potential to achieve a $100 billion space sector with even greater growth.
ADL highlights several key areas that can drive accelerated growth in India’s space industry. These include promoting the adoption of satellite-based internet connectivity, positioning India as a global leader in launch services, and developing capabilities in space mining, manufacturing, and in-orbit servicing. Success in these areas could result in a doubling of the space industry’s contribution to India’s GDP from its current level of 0.25% to 0.5% by 2040.
Currently, India holds a modest 2% share of the global space economy. However, ADL’s research predicts that by 2022-2040, this share could increase to 4%, growing at a CAGR of 9.2%. This growth will be fueled by rising public spending on space exploration and increased private sector involvement, which will address the growing demand for launch services and satellite-based services such as media, communication, navigation, and internet connectivity.
The opening up of India’s space industry to private entities has led to the emergence of local space startups. The Indian Space Research Organisation (ISRO) plays a crucial role in facilitating this growth, and the newly established Indian National Space Promotion and Authorization Centre (INSPACe) serves as a conduit between ISRO and private-sector space enterprises. In 2022 alone, space startups received $112 million in funding, out of a total of $247 million since 2016.
Despite the influx of investments, challenges remain, particularly in terms of financing and technology. The government is actively considering revisions to the foreign direct investment (FDI) policy for the space industry, aiming to attract more financial support and technological cooperation from other geographies. Additionally, enhancing education and skill development, especially in cutting-edge technologies like artificial intelligence, robotics, and quantum computing, will be crucial for India’s space sector to fully realize its potential.
To seize the $100 billion opportunity in India’s space industry, continued improvements to the policy framework and regulatory environment are necessary. Foster an ecosystem that fosters the growth of space startups. Collaboration with international partners will also play a vital role in capitalizing on the growing international space market.
With its technological prowess and dedication to exploration, India is well-positioned to capitalize on the evolving space industry. By leveraging the potential of the private sector, fostering skill development, and creating a conducive regulatory environment, India’s space sector can make a significant contribution to the country’s economy while creating millions of new jobs.
