India’s space sector is undergoing a significant transformation. Earlier, it was led solely by the government agency ISRO. Now, with the entry of private companies, a new era has begun. This is not just a policy change but also a structural and economic shift that is positioning India as a key player in the global space economy.
Let us understand how private players are increasing their role in the Indian space sector and what it means for investors.
What’s Happening?
India’s spacetech sector is ready to embark on a new path in 2025. The government has set a target of building a $44 billion space economy by 2030. The market is projected to grow at a CAGR of 26% between 2023 and 2030.
Until 2020, India’s space missions were entirely under the control of ISRO. That year, the government introduced a historic policy change, allowing private companies to participate. To facilitate this, New Space India Limited (NSIL) was established. It provided private players with opportunities in satellite launches, spacecraft manufacturing, and ground system development. The move was aimed at promoting innovation, attracting foreign investment, and strengthening India’s position in the global space industry.
Check out our infographic on India’s space economy explaining its contribution to the nation’s growth and its comparison with the global industry.
Government’s Support
The Government of India has taken several important policy steps to open the space sector for private participation. The Indian Space Policy 2023 allowed 100% direct foreign investment in satellite manufacturing. It also permitted up to 74% FDI in the ground and user segment, and up to 49% in launch vehicle development.
One of the most ambitious measures was the announcement of a Rs 1,000 crore venture capital fund in October 2024. Building on this, the government has already set up a Rs 10,000 crore fund under the leadership of IN-SPACe. Over the next five years, this fund will support more than 40 companies, both large and small, in the spacetech domain. Each company will receive funding between Rs 10 crore and Rs 60 crore.
In addition, the Space-Based Remote Sensing Policy 2020 and the Spacecom Policy 2020 have provided a clear framework for private sector growth. In the Union Budget 2025-26, the Department of Space was allocated Rs 13,416 crore.
Ambitious Plans by States
Karnataka, through its draft Karnataka Space Technology Policy 2024-29, aims to capture 50% of India’s space market and 5% of the global space economy. The state plans to attract investments worth Rs 25,590 crore and support over 500 start-ups and MSMEs. It also targets training 5,000 professionals, including 1,500 women.
Meanwhile, Tamil Nadu has approved the Space Industrial Policy 2025. The state is aiming for Rs 10,000 crore in investments and the creation of 10,000 high-quality jobs. It also plans to set up special ‘Space Bays’ in Madurai, Thoothukudi, Tirunelveli, and Virudhunagar.
What is in it for Investors?
India’s spacetech sector is evolving at a rapid pace. While PSU companies like HAL, BEL, and Mishra Dhatu Nigam (MIDHANI) continue to contribute to aerospace and defence technology, private players are emerging as equally significant.
Larsen & Toubro (L&T) has played a role in missions such as Chandrayaan and Gaganyaan. Data Patterns and MTAR Technologies are contributing to satellite subsystems and launch vehicle components. Similarly, Walchandnagar Industries, Linde India, and Centum Electronics are expanding their presence in precision engineering, cryogenic solutions, and communication subsystems.
In 2024, Infosys invested Rs 17 crore in GalaxEye Space Solutions, while Alphabet Inc. invested Rs 307.08 crore in Pixxel, reflecting confidence in the long-term potential of the sector.
Although overall funding for spacetech start-ups fell by 35% in 2024, the number of deals increased from 11 to 14, and total start-up funding rose by 20%. This indicates that private companies are driving the boom in India’s spacetech industry.
What’s Next?
Indian spacetech is no longer confined to the domestic market. Skyroot launched India’s first private rocket, Vikram S, marking a historic shift in private access to space. Agnikul Cosmos is developing the country’s first semi-cryogenic, 3D-printed engine and plans to launch it from its private launchpad in Sriharikota. Pixxel is innovating with hyperspectral satellites capable of monitoring crop health, pollution, and climate in real time.
With India’s growing share in the global space economy, strong policy support, and a culture of innovation, this sector is poised to become a key pillar of India’s economic growth in the coming decades.
*The companies mentioned in the article are for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
