Macroscan | 7 Aug 2023
THE SPACE ECONOMY OF
INDIA AND ITS PRIVATISATION
Penned by: Mohul Kishore & Srishti Gupta
In this edition of Macroscan, we seek to study the Space Economy of
India while shedding light on privatisation, future opportunities and of
course an overview about the latest moon mission: Chandrayaan-3.
India has a long history of space exploration, dating back to the launch of
its first satellite, Aryabhata, in 1975. India has a successful launch vehicle
program, with the Polar Satellite Launch Vehicle (PSLV) and the
Geosynchronous Satellite Launch Vehicle (GSLV) being two of the most
successful launch vehicles in the world.
The Indian space industry is home to several leading companies, including
ISRO, Antrix Corporation, and Godrej Aerospace.
START OF THE PRIVATE SECTOR
The Indian space industry since a long time, has been dominated by the
government, but there is a growing private sector participation who have
the potential to drive growth and revolutionise the Indian Space Sector.
Just last year, in November 2022, India’s first private space vehicle,
Vikram-S named after Vikram Sarabhai, the father of the India’s space
programme, was launched as part of mission Prarambh: The start of India’s
private space sector.
The company behind the launch was a homegrown, Hyderabad-based
startup Skyroot Aerospace Private Limited. Such encouraging updates
open up a wide range of avenues for more and more private players to
enter the space sector.
While the actual launches currently are government dominated, a
number of private companies are involved in the manufacturing of
satellites and space-based applications.
The government is also encouraging private sector participation
in the space sector, and it has set up a number of initiatives to
promote this like tax breaks, grants etc.
The government is also creating a new Space Technology Park in
Ahmedabad, while also spending a staggering $112 million in
funding for new-age space startups in the country.
PRIVATE PLAYERS IN OTHER NATIONS
Talking about the most well-known companies that work in the
space sector all around the world, we come across names such as
Boeing, Space-X, Blue Origin and so on. Let’s have a look at their
contributions and missions.
As one of the world’s largest space and exploration companies, Boeing
works closely with NASA on many of its high-priority projects. Currently,
they help build the propulsion technology for NASA.
Department or Agency — SDG Progress Report 2020
The space exploration company SpaceX, owned by the famous
Elon Musk has over $127 billion in equity and over 12,000
employees, is among the world’s largest space and exploration
companies.
They have constantly been making strides into space exploration and
continue to push the envelope in the field of R and D and other technology
related areas such as their Starlink Internet satellites.
Another space exploration company, owned by former Amazon
CEO, Jeff Bezos is Blue Origin, the company made headlines by
carrying a manned (including Jeff Bezos himself) spacecraft to
the edge of space, opening up the vast potential of Space Travel.
You will be shocked to know, that all in all, Private space
companies which total over 10,000+ have a combined value of
over $4 trillion. Just to put that into perspective, India’s GPD is
around $3.56 trillion.
While companies like Space-X and Blue origin came up in early
2000’s, India’s private Space Economy is only opening up just
now.
This leaves a massive amount of untapped potential for the
upcoming private players to tap and make use of. Taking
inspiration from other companies already working in this field,
Indian private sector can combine best of 2 worlds.
Forging collaborations for the exchange of useful R and D whilst supplying
an economical and reliable space launch, Indian companies can quickly
grow in size, providing revenue, taxes and jobs to a lot of Individuals.
Department or Agency — SDG Progress Report 2020
SPACE ECONOMY: SOME NUMBERS
The Indian space market, currently valued at about $8 billion, is
growing at a CAGR of 4 percent, outpacing the global average of 2
percent. With this strategic growth trajectory and support from
the government including the private sector, India's space
economy has the potential to reach $40 billion by 2040.
Going by the numbers, India’s space sector could double its
contribution in India’s GDP, from the current 0.25 percent to 0.5
percent by 2040 with a potential creation of more than 3 million
additional jobs in the country.
The space economy is divided into three main sectors:
Space applications accounted for the majority of the
economy, at 73.57%. This includes the use of satellites for
telecommunications,
earth
observation,
navigation,
and
disaster management.
Space operations accounted for 22.31% of the economy, and
includes the launch and operation of satellites
Space manufacturing accounted for 4.12% of the economy,
and includes the production of satellites, launch vehicles, and
other space hardware
Department or Agency — SDG Progress Report 2020
DIRECT CONTRIBUTIONS
The space economy has a number of positive macroeconomic
impacts. It creates jobs, generates tax revenue, and helps to
drive innovation.
In 2020-21, the space economy supported over 300,000 jobs. It
also generated ₹10,000 crore in tax revenue. The sector also
supports a large number of indirect jobs, such as those in the
manufacturing, services, and research and development sectors.
INDIRECT CONTRIBUTIONS
The space economy also helps to drive innovation. ISRO is a
leading research and development organization, and its work has
led
to
the
applications
development
in
other
of
new
sectors,
technologies
such
as
the
that
have
automotive,
telecommunications, and healthcare sectors.
The space economy of India has the potential to generate
significant economic and social benefits for the country. The
space sector can help to improve India's infrastructure and its
ability to manage natural disasters by providing real time
information prior, during and after any such events.
The future of the space economy of India is bright. With its
strong
government
support
and
growing
private
sector
participation, India is well-positioned to become a major player in
the global space industry.
The space economy of India is expected to grow rapidly in the
coming years, driven by the increasing demand for satellitebased services and applications. India’s space sector is well
or Agency
— reliable
SDG Progress
Report
2020
known for itsDepartment
cost-efficient
and
space
rockets
ISRO spend on missions currently can be briefly described as 30
per cent on raw materials, consumables, chemicals; 20 per cent
on fuel and oxidisers; another 20 per cent on manufacturing and
rest on testing, launching, insurance, documentation and design.
CHANDRAYAAN-3
The goal of Chandrayaan-3, the third Moon mission by India’s
space agency ISRO, is to place a lander and rover on the south
pole of the moon by performing a soft landing and then to operate
the equipment for roughly one lunar day (14 Earth days).
This mission is a follow-up to the first two Chandrayaan missions
which provided us with valuable insights.
LISTED COMPANIES BEHIND CHANDRAYAAN-3
Larsen and Toubro (L&T) supplied several crucial components,
supply of ground and flight umbilical plates, manufacturing and
proof pressure testing of critical booster segments. Their
Aerospace Manufacturing Facility fulfilled the stringent quality
Department
or Agency
SDGmission.
Progress Report 2020
and timeline
requirements
for—the
Hindustan Aeronautics supplied several key components to
National Aerospace Laboratories (NAL), provided key support
for the Chandrayaan-3 mission.
Bharat Heavy Electricals Limited achieved a unique milestone
of supplying its 100th battery to ISRO for Chandrayaan 3
Paras Defence and S pace Technologies- The Department of
Space (DoS) and NewSpace India Limited (NSIL) signed a
memorandum of understanding (MoU) in 2020 to assist NSIL in
identifying those technologies developed by ISRO that have
the potential for commercialisation and can be transferred to
external entities in the public and private sectors. Under this
agreement, as of October 2021, NSIL has transferred over 363
technologies for commercialisation.
OUR OPINION
Looking at the massive role being played out by private players,
albeit in an indirect manner, it makes us wonder about the
potential of Indian space sector once more and more private
players enter the market.
The private players could venture into communications, space
research, space travel as well as the related use of technology in
other fields.
I believe, if given the much-needed fundings, support and
freedom to experiment, to fail and to learn, new age Indian space
Companies hold the potential to contribute billions of dollars to
the Indian economy and provide employment to thousands while
also expanding the scope of space exploration.
Another key role that the private players would play would be the
innovation of technology which would have multiple uses across
industries. In their consistent efforts for funds and profits they
would go all out to figure out ways to apply their know how in
such a way as to prove valuable in the present as well as in the
long-term space exploration missions.
This might just prove to be the game-changer needed by the
Indian Space sector.
REFERENCES
https://www.financialexpress.com/business/defence-the-economicsof-chandrayaan-3-the-dividends-it-can-yield-beyond-research3175644/
https://www.outlookindia.com/business/chandrayaan-3-how-is-indiafuelling-its-space-economy-as-more-private-players-enter-thesector-news-302011
https://www.cnbctv18.com/science/chandrayaan-3-launch-indiasspace-sector-could-be-a-1-trillion-economy-says-minister17165371.html
https://www.livemint.com/companies/news/these-are-the-listedcompanies-behind-the-successful-launch-of-chandrayaan-3-missiondo-you-own-any-11689501374695.html
https://www.thehindu.com/sci-tech/vikram-s-indias-first-privaterocket-lifts-off-from-isro-spaceport/article66152534.ece
https://www.forbesindia.com/article/news/how-indias-spaceeconomy-could-hit-100-billion-by2040/87001/1#:~:text=The%20Indian%20space%20market%2C%20
currently,reach%20%2440%20billion%20by%202040.
https://history-computer.com/10-largest-space-and-explorationcompanies/
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