Centre allocates ₹1000Cr venture fund to boost Space Economy in India

Context: In the recent Budget 2024, the Finance minister announced Rs.1000 crore venture capital to fund the space economy.

Space Economy

• The space economy refers to the broad range of activities and the use of resources that create value and benefits for human beings in the course of exploring, understanding, managing, and utilizing space.
• It includes not just the direct activities related to space travel and satellite launches but encompasses a variety of sectors including:
  • Manufacturing: Building rockets, satellites, space stations, and other spacecraft.
  • Satellite Services: Communications, Earth observation, and meteorological services are provided by satellites, which are crucial for industries like broadcasting, agriculture, disaster management, and navigation.
  • Launch Services: The services provided by companies that launch objects into space, including satellites, scientific instruments, or other spacecraft.
  • Space Tourism: The commercial activity of sending civilians to space for leisure, which contributes to the space economy by opening up new markets.
  • Research and Development: Innovations in space technology that can be applied in other industries on Earth, such as materials science, telemedicine, and robotics.
  • Mining of Extraterrestrial Resources: Potential future activities aimed at extracting resources from asteroids, the Moon, or other celestial bodies to be used in space or brought back to Earth.

Space Economy in India

• Global Market Share: Currently, India’s space sector represents about 2% of the global space economy.
  • By 2033, India’s space economy is projected to grow to approx 8% of the global market share.
• Current Market Size: The Indian space economy is valued at approximately $8.4 billion, with downstream services, particularly communication and data applications (nearly 80%).
• Annual Growth Rate: The space economy has experienced an average compound annual growth rate (CAGR) of 8%.
• Increase in Space Start-Ups: Data from the DPIIT Start-Up India Portal shows that the number of space start-ups has grown from just one in 2014 to 189 in 2023.
• Investment in Space Start-Ups: In 2023, investment in Indian space start-ups reached $124.7 million.
• Growth in Satellite Launches: ISRO has seen an increase in its satellite launch activities, with 389 of the 424 foreign satellites it has launched since the 1990s being sent into orbit in the last nine years.
• Revenue from Satellite Launches: India has earned $174 million from launching foreign satellites.

Initiative taken for Indian Space Economy

• Indian Space Policy, 2023: This policy facilitates the comprehensive involvement of Non-Governmental Entities (NGEs) across various space activities.
• FDI Norm under Automatic Route: Allows for 100 per cent foreign direct investment (FDI) via the automatic route in the manufacture of components, systems, and subsystems for satellites, including ground and user segments.
• Investment Caps for Satellite Manufacturing and Operation: Permits up to 74 per cent FDI under the automatic route for the manufacturing and operation of entire satellites.
• FDI Norm under Government Approval Route: Investments exceeding specified limits require government approval.
• Regulation on Foreign Investment: As per the existing policy, any foreign investment in the manufacturing and operation of satellites must receive government approval.
• ASAT Capability: India demonstrated its anti-satellite weapon capabilities on March 27, 2019, during ‘Mission Shakti’.
  • Conducted the first tabletop space warfare exercise, showcasing the integration of satellite communications and reconnaissance to boost intelligence and firepower.
• Defense Space Agency (DSA) and Defense Space Research Organization (DSRO): Established in 2019, these organisations aim to enhance India’s defence capabilities in space.

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