Space Insurance Ecosystem in India

The failure of India’s PSLV-C62 mission in January 2026 , which resulted in the loss of 16 satellites including DRDO’s EOS-N1 and multiple commercial payloads, has renewed focus on the need for space insurance, especially as private startups absorb heavy losses—with industry estimates suggesting combined launch and payload losses could range up to ₹500–₹800 crore or more in such failures, underscoring the financial risks of uninsured space ventures.

Indian Space Economy

• Current Value: India’s space economy, currently estimated to be at $13 billion, contributing
  ~ 2% to the global space economy.
• Government Spending: Annual spending on space programs is approximately $2 billion.
• Satellite Launches and Revenue: Since 1999, India has launched 381 satellites for 34 countries, generating $279 million in revenues.
• Global Position: The Indian Space Research Organisation (ISRO) is the sixth-largest national space agency in the world.
• Future Potential: India’s space economy is expected to reach $40 billion by 2030 (from $13 billion).

Space Insurance

Space insurance is a specialised risk-transfer mechanism that provides coverage for launch vehicles, satellites, payloads, and third-party liabilities arising from space missions.

Need for Space Insurance in India

• Commercial Space Growth: Insurance mechanisms are essential for enabling private participation in India’s expanding space economy.
  • India’s shift toward a commercially independent, demand-driven space ecosystem requires structured risk-management mechanisms.
• Investor Confidence: A robust insurance framework strengthens investor trust and complements India’s 100% FDI liberalisation in the space sector.
• Protection Against High-Risk Losses: Space missions involve costly assets and operational uncertainties, requiring structured risk coverage.
• Treaty Compliance: Third-party liability insurance helps manage State responsibility under international conventions.
  • Under the Outer Space Treaty, 1967, India bears responsibility for all space activities launched from its territory, including private missions.
  • The Liability Convention, 1972 makes India absolutely liable for damage on Earth or to aircraft caused by its space objects.
  • The Registration Convention, 1976 requires States to register space objects, strengthening accountability and fixing responsibility in case of damage.
• Private Sector Regulation: The Indian Space Policy 2023 and the regulatory framework of IN-SPACe enable private participation, making insurance and liability mechanisms increasingly necessary.
• Sustainable Space Governance: Integration of Space Situational Awareness (SSA, debris mitigation and insurance strengthens India’s long-term space security architecture.

Global Space Insurance Market Growth

• Rapid Expansion Worldwide: According to the Space Insurance Market Report 2026, the market is growing due to rising commercial launches.
• Market Size: Expected to increase from $4.06 billion in 2025 to $4.43 billion in 2026, with a CAGR of about 9.1%.
• Drivers: Growth is largely attributed to the increase in commercial satellite missions.

Types of Space Insurance Coverage

• Pre-launch Coverage: Covers damage during transportation, storage, fuelling, and final integration, but is least opted for as it is the safest phase.
• Launch Coverage: Protects against uncertainties from ignition through lift-off, separation, and satellite deployment into orbit.
• In-orbit Coverage: Covers early orbit failures, satellite functionality issues, and long-term operational failures
• Third-Party Liability Insurance: Covers damage caused to other States, aircraft, persons or property due to space objects, helping India meet its international liability obligations.

Regulatory Framework

• Encouragement for Insurance Coverage: Private entities are encouraged by the Government to obtain adequate insurance to cover risks associated with space activities.
• Draft Liability Policy: A draft “Policy framework and guidelines addressing State’s Liability towards third party damages arising due to Indian Space Objects” is under consultation.
• Launch Operator Responsibility: The framework envisages third-party liability insurance to be maintained by launch operators as one measure to cover:
  • Risks of third-party damages
  • India’s liability obligations under international treaties and conventions

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Key Challenges of Space Insurance

• High Premium Costs: Launch insurance premiums typically range between 15–20% of mission value.
• Capital Burden on Startups: Early-stage startups may struggle to pay upfront premiums, diverting scarce funds away from R&D and hardware development.
• Rising Orbital Risks: Increasing space debris and the threat of Kessler Syndrome raise in-orbit insurance complexity and long-term mission risk.
• Dependence on Foreign Reinsurance: Domestic insurers lack the capacity to cover large-scale risks, forcing reliance on foreign reinsurance markets and global volatility.
• Lack of Historical Mission Data for Risk Pricing: Accurate premium estimation requires extensive historical failure and performance data, which is limited for private Indian launches and emerging NewSpace missions
• Cybersecurity Threats to Space Assets: Increasing reliance on software-driven satellites and ground stations exposes missions to cyberattacks, creating emerging insurance liabilities

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