States' race for space investment may help sector hit $44 bn by 2033

Space in the new frontier for states in the one-upmanship game to draw investment. 

On April 17, Gujarat annou­n­ced a long-term strategy to accelerate growth in the space sector from 2025 to 2030. With­in hours, Tamil Nadu, which had already published a draft space policy, unveiled the Tam­­il Nadu Space Industrial Policy. 

There is a reason states are betting big on space and space-related technology. The size of India’s space sector is expected to jump from around $8.4 billion in 2024 to $44 billion by 2033, according to a Mar­ch report by the Federation of Indian Cha­m­bers of Commerce and Industry (F­ic­ci)­ -­EY. With that, it will soar from 2 per cent of global market currently to 8 per cent. 

This follows the opening up of space to private participatio­n in June 2020, the Indian Spa­ce Policy of 2023, and a luc­­r­ative foreign direct investment policy of February 2024. 

A major catalyst for the projected growth are the 250-odd startups working in the “upstr­eam” and “downstream” segments of India’s space eco­no­my. The upstream segment refers to all activities, products, and infrastructure for the dev­elopment, testing, launch, operat­ions, and monitoring of space assets. The downstream segment is about applications, services, and devices that rely on satellites to create business value. 

The sector needs a net investment of $22 billion to achi­eve its 2033 target, said Pawan Goenka, chairman, Indian National Space Promotion and Authorisation Centre (In-Space), the space industry’s Department of Space-affiliated regulatory body.  This, said Goenka while speaking to mediapersons in Mumbai, may require at least $2.5 billion throu­gh foreign players, besides sizable investment from domestic majors such as the Tata Group, Larsen & Toubro, and Bharti Enterprises-backed OneWeb. 

Understandably, every Indian state that sees itself as an industrial powerhouse wants to tap into this promising sector and is framing policies accordingly. Besides Tamil Nadu, and Gujarat, Telangana, Kerala and Karnataka have space sector-related policies or draft policies in place. 

“All of them are looking at job creat­ion,” said A K Bhatt, director general, Indian Space Association (ISpA). They are also providing incentives such as subsidised land, state goods and services tax refund, technology transfer, grants, and loans, added the retired lieutenant general. “For the private sector, this is a great opportunity. This was happening only in China, and maybe Australia, where provinces are fighting it out to attract investment.”  

These state-level policies, Bhatt added, complement the national vision and will enhance competition, helping the sector achieve the $44 billion ambition by 2033. 

Telangana was the first to announce a space policy, in 2022, followed by Kerala in 2023. So far, Telangana leads in the efforts through initiatives like the T-Hub incubator and the Image Tower, which provides dedicated infrastructure for geospatial and earth observation ventures. The state’s initiatives have also helped build regional innovation hubs (see chart). 

 

 

Maharashtra is also actively working on drafting a space policy to establish public-private partnerships to bolster space exploration, satellite communications, and space applications in sectors like agriculture, education, and urban planning. The state is emphasising the importance of entrepreneurship in the space sector, providing incentives like financial subsidies, infrastructure access, and mentoring programmes. 

Though some states have no specific policy, they are trying to tap into the booming sector through other initiatives. Uttarakhand, for instance, has the Council for Science and Technology, and Uttar Pradesh has the Defence Industrial Corridor, where the focus is on integrating the internet of things (IoT) with defence. 

Several emerging startups are also shaping the Indian space ecosystem. Among them are Dhruva Space (satellite manufacturing and launch services); Bellatrix Aerospace (propulsion systems for satellites); Skyroot Aerospace (development of launch vehicles); Manastu Space (green propulsion systems for satellites); Pixxel (building a constellation of earth imaging satellites); Agnikul Cosmos (3D-printed rocket engines and small satellite launch vehicles); and MapmyIndia (geospatial solutions and navigation technologies). 

“State-level space policies are becoming a watershed for India’s space ecosystem,” said Yashas Karanam, cofounder and chief operating officer, Bellatrix Aerospace. “We are buil­ding a powerful bottom-up model for the ecosystem, with Karnataka’s drive to capture 5 per cent of the global market, Telangana’s aerospace corridors and industry tie-ups, Gujarat’s SpaceTech Policy 202­5 –30 and its incentives, and Tamil Nadu’s new Space Indu­s­trial Policy.” Assam, he add­ed, has also joined the race throu­gh its ₹120-crore ASSAMSAT earth-observation mission with IN-SPACe and the Indian Space Research Organisation. “This could potentially pave the way for a state space policy in the Northeast as well.” 

The Ficci-EY report indicates that of the $44 billion in 2033, a lion’s share ($14.8 billion) is expected to come from satellite com­m­unication (Satcom), with the acceleration of broadband penetration, enhan­ced financial inclusion, and strengthened digital infrastructure supporting flagship initiatives such as Digital India and BharatNet.  

Increasing use of earth obse­rvation and remote sensing is estimated to contribute $8 billion. It is already transforming agriculture, disaster management, and climate resilience. Similarly, India’s navigation sector is projected to reach $9.3 billion by 2033 and will have a direct impact on the country’s logistics industry that is worth over $200 billion. States are trying to capitalise on these potentials. 

“State space policies do not lead to fragmentation or duplication, but are harbingers of added opportunities and fair competition for growing space sector,” said Bhatt, addi­n­g that areas like spectrum man­a­g­em­ent, orbital slots, Int­­­­­e­­r­na­tional Telecommunication Union-level engagements “mus­t and will remain coordinated through central authorities”. 

Propelled by states’ ambitions and Centre’s support, India could be well on track for space glory.