Context

According to a recent report from the World Economic Forum (WEF), the global space economy will reach a value of $1.8 trillion by 2035, nearly identical to the scale of the world semiconductor industry.

• The report titled ‘Space: The $1.8 Trillion Opportunity for Global Economic Growth’, is authored by the World Economic Forum (WEF) and consulting firm McKinsey & Co.

Drivers of Space Economy

• Decrease in Launch Cost: Rapid and large drop in launch costs of satellites and rockets, which has fallen 10-fold over the past 20 years. 
• Price of Data and Connectivity: It is also expected to drop by at least 10 percent as demand increases by 60 percent by 2035.
• Commercial Innovations: Example, improvement in resolution of Earth-observation technology, which in turn drives down the price to access the said technologies.
• Diversification of Technologies: There is a rapid diversification of space-based technologies and activities such as space tourism.
• Cultural Awareness: Cultural awareness and general enthusiasm for space in recent days is also a major driver of interest in space for future generations.
• Catalysts of Expansion: 
  • Various industries are both drivers and beneficiaries of growth and diversification by improving three key aspects of space technology: 
    • Harmonisation
    • Increasing ease of usability and accessibility, and 
    • Education and awareness of growing technology.
• New Space Entrepreneurship has emerged in India with many start-ups which seek value in exploring end-to-end services in the Business-to-Business and Business-to-Consumer segments using New Space. 

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Space Economy in India: Current Size and Future Projections

• Share in Global Space Economy: At current, the space sector in India accounts for around two percent of the global space economy.
  • India’s space economy has the potential to reach $44 billion by 2033 with about 8 per cent of the global share.
•  Size of the Indian Space Economy: It is estimated around 8.4 Billion USD. Of this, the downstream services market, primarily of communication and data applications, accounts for close to 80% of the total space economy, wherein the private sector is a major contributor. 
• Compound Annual Growth Rate (CAGR): As per the various market surveys, the space economy has grown with an average CAGR of 8%.
• Rise in Number of Space Start-Ups: As per DPIIT Start-Up India Portal, the number of Space Start-Ups have increased from just 1 in 2014 to 189 in 2023.
  • The investment in Indian Space Start-Ups has increased to $ 124.7 Million in 2023.
• Increasing Role of Private Sector: Private companies are exploring satellite-based communication solutions,  Satellite integration and testing facilities.
• Rise in Satellite Launches: There is an increase in the number of launches accomplished by the ISRO.Out of the 424 foreign satellites launched by Isro since 1990s, 389 (more than 90%) were launched in the last nine years.
  • India earned $174 million from launching of foreign satellites.

Steps Taken to Boost Space Economy in India

• Indian Space Policy, 2023:  It enables end-to-end participation of Non-Governmental Entities (NGEs) in all domains of space activities.
  • FDI Norm under Automatic Route: The policy allows up to 100 percent investment under automatic route for the manufacturing of components, systems and subsystems for satellites, ground segments and user segments.
    • For manufacturing and operating an entire satellite, up to 74 percent investment will be allowed under the automatic route. 
  • FDI Norm under Government Approval Route: Anything beyond the limit will have to go through a government approval process. 
    • Under the current policy, any foreign investment in manufacturing and operating satellites is allowed only with government approval.
• ASAT Capability: On 27 March 2019, India tested an anti-satellite weapon during an operation code named ‘Mission Shakti’. 
• IndSpaceX: First table-top space warfare exercise – IndSpaceX, demonstrated integrated satellite communications and reconnaissance for enhanced intelligence and firepower.
• Defense Space Agency (DSA):  In 2019, India established the DSA and the Defense Space Research Organisation (DSRO).

Opportunities Offered by the Space Economy

• Advancing Scientific Knowledge: A space station enables India to conduct cutting-edge research in various fields—such as astronomy, biology, physics, medicine and engineering. 
• Enhancing the Nation’s Prestige: It will showcase India’s achievements and capabilities in space and demonstrate its commitment and leadership in advancing humanity’s frontiers. 
• Promoting Global Cooperation & Peace: It will offer opportunities for collaboration and exchange with other countries and organizations in space.
• Space Mining: Asteroids are rich in precious resources crucial for industries. They offer an alternative with abundant reserves, avoiding environmental concerns tied to wildlife harm during extraction. 

Challenges in the Development of Space Economy

• Space Debris: According to NASA, there are more than 100 million pieces of space debris at a size of one millimetre or larger orbiting the Earth.
• Lack of Regulatory Ecosystem for Startups: The start-ups in India are yet to take off in the absence of regulatory clarity. 
• Cyber Attacks: The draft National Cyber Security Strategy lacks a focus on space security, despite concerns raised by the Data Security Council of India about potential attacks on critical infrastructure, including space agencies. 
• Minimal Share in Global Economy: India’s share is estimated at just 2% of the global market.
• Unidentified Anomalous Phenomena (UAP): The Indo-Tibetan Border Police (ITBP), have consistently reported UAP sightings. India is lagging significantly behind other nations in addressing the UAP issue. 
  • UAPs denote flying objects linked to non-human (alien) intelligences. 
• Human Spaceflight Expertise: India lacks experience in human spaceflight, which is essential for building and operating a space station. 
• Hazards to Astronaut Health: The space environment can be lethal without the correct protection equipment and precautions. 

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Way Forward to the Indian Space Economy

• Integrating space into the National Cyber Security Strategy:  There is a need to integrate critical cybersecurity safeguards into India’s national space policy, aligning it with the National Cyber Security Strategy and National Security Strategy. 
  • India needs to implement a Purple Revolution, incorporating cybersecurity red and blue teaming exercises under the Ministry of Defence and Home Affairs to enhance offensive and defensive capabilities.
  • ISRO defends against more than 100 cyberattacks each day.
  • India needs to emulate the US and prepare satellite hacking sandboxes that can be experimented with to find system vulnerabilities.
• Increasing Space Budget: The space budget allocation must be increased from 0.04 percent to at least 0.5 percent of GDP to boost research centres and space standards.
• Indian Space Resilience Agency: India must enhance space supply-chain resilience and security within QUAD’s space cooperation, establishing a central Indian space resilience agency for joint monitoring and incident response exercises.
• Permanent Body for UAP: India must establish a permanent body for UAP research under the Defence Ministry like the US and UK or under ISRO, on the French model.
• Protection from Space Debris: Presently, India relies on data compiled by NASA to ascertain threats to its orbital assets. Thus, protection from space debris needs to track potentially threatening debris and change the course of the functional hardware. 
• • Future solutions can include more accurate tracking of debris and measures to lower their orbit for eventual burn out in the atmosphere.
  • Closer association with Inter Agency Space Debris Coordination Committee (IADC) and developing satellite bodies which can withstand minor impacts are some of the other steps which can be taken.
• Advancing Space Capabilities: This can be done by developing sophisticated space-based weaponry in jamming devices, directcluding hard kill guided missile systems,ed energy weapons, and electromagnetic pulse systems for space-to-space operations.