GS Paper 3: Science and Technology
Context: According to Tracxn’s Space Tech in India report, India’s space-tech sector recorded a record $200 million in funding in 2025, with Bengaluru emerging as the leading space-tech hub, accounting for 57% of the sector’s total funding.
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Key Highlights
- Ecosystem: India has 285 space-tech companies (274 active), of which 72 have received equity funding.
- Total Funding: The sector has raised $871 million (as of July 2026).
- Funding Trend: Funding increased from $43 million (2021) to $200 million (2025); 2026 YTD funding stands at $113 million across 24 rounds.
- Funding Concentration: The Top 10 companies account for over $548 million (60%+) of total funding; only 10 companies have raised more than $15 million.
- Expected Consolidation: Over the next 12–18 months, the sector is likely to witness mergers, pivots, and closures among startups unable to secure follow-on funding, similar to the fintech consolidation witnessed during 2023–24.
- Skyroot Aerospace: India’s first SpaceTech unicorn, raised $150 million.
- It developed Vikram-1, India’s first privately developed orbital-class rocket, which successfully reached Low Earth Orbit (LEO) on 18 July 2026.
Drivers of Growth as per the Report
- 2020 Space Sector Reforms: Enabled private participation across the space value chain.
- ISRO’s Technology Transfer Framework: Provides startups access to space technologies, test facilities, and mission expertise.
India’s Space Economy
- Current Size: Valued at around US$8.4 billion, accounting for about 2% of the global space economy.
- Growth Targets:
- US$44 billion by 2033, with a target of 8% global market share.
- US$100 billion by 2040, aiming for 10% global market share.
Comparison with Global SpaceTech Funding
- India’s Funding: Indian SpaceTech startups have raised about US$354 million over the last five years.
- Global Funding: Global SpaceTech startups attracted nearly US$28 billion during the same period.
- Funding Gap: India’s private SpaceTech funding remains only a small fraction of global investment, despite its growing space economy.
- Recent Trend: Funding in India fell to US$59.1 million in 2024, reflecting the global venture capital slowdown.
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Steps Taken to Boost Private Sector Participation in the Space Sector
- Space Sector Reforms (2020): Opened the entire space value chain to private participation.
- Indian Space Policy, 2023: Provides the policy framework to enhance private-sector participation and commercialisation across the space sector.
- IN-SPACe: Established as a single-window agency to promote, authorise, and supervise private space activities.
- Liberalised FDI Policy (2024): Permits up to 100% FDI in specified space activities under the automatic or government route.
- ₹1,000-Crore Venture Capital Fund: Established under IN-SPACe to support space startups and catalyse private investment.
- Technology Adoption Fund: Supports the commercialisation of indigenous space technologies developed by startups and industries.
- Technology Transfer & Infrastructure Access: Provides access to ISRO technologies, testing facilities, and mission expertise for private entities.
29 Jul 2026
