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The Surprising Striver in the World’s Space Business
When India launched its first rocket in 1963, it was a modest attempt by a developing country to engage in cutting-edge technology. Fast forward to today, and India has emerged as a significant player in the global space industry. What started with a rudimentary launch has now evolved into a thriving space sector with immense potential and innovation.
Dr. Jitendra Singh, the Union Minister of State (Independent Charge) for Science and Technology, MoS PMO, Department of Atomic Energy and Department of Space, and MoS Personnel, Public Grievances, and Pensions, highlighted India’s remarkable progress in the field of space technology. He noted that India has swiftly established itself with over 140 space startups, gaining recognition worldwide. He attributed this success to Prime Minister Narendra Modi’s decision to involve private players in India’s space sector, leading to significant advancements.
During his speech at the G20 4th edition of Space Economy Leaders Meeting (SELM), Dr. Singh emphasized that India is now providing valuable insights and contributions to major space agencies across the globe, despite starting its space journey later than some other nations. He pointed out that even established space technology leaders are seeking India’s expertise, evident from the inclusion of space-related agreements in Prime Minister Modi’s recent visit to the USA.
Investing in Spacetech
India’s spacetech sector has witnessed remarkable growth in recent years, bolstered by government support and private-sector involvement. Between 2014 and May 2023, over 30 significant deals helped startups raise approximately $233 million, signaling the sector’s rising prominence. The government’s commitment to space exploration is reflected in Finance Minister Nirmala Sitharaman’s Interim Budget allocation of INR 7,313.73 crore for space research and technology. This substantial investment demonstrates India’s focus on enhancing its space capabilities, supported further by the registration of 100 startups with the Indian Space Research Organisation (ISRO) in 2023.
To stimulate the spacetech ecosystem, the government has implemented several measures. For instance, the Goods and Services Tax (GST) Council introduced a 0% GST regime on spacecraft, satellites, and launch vehicles, acting as a catalyst for startup growth. Additionally, ISRO’s collaboration with Microsoft aims to provide spacetech companies with technology tools, mentorship, and go-to-market support, helping them scale and become enterprise-ready.
Investing in spacetech presents both opportunities and challenges. The sector’s reliance on innovation and intellectual property creates unique investment avenues, such as sponsoring R&D and licensing patented technologies. While returns may not be immediate, the long-term potential is significant, making spacetech a high-reward sector. Investors must approach this domain with patience and a willingness to embrace its inherent risks.
Transitioning From Government Dominance to Private Innovation
India’s space journey started with the Indian Space Research Organization (ISRO), often referred to as India’s version of NASA. ISRO’s early achievements, such as launching India’s first satellite, garnered national pride. However, India’s focus shifted to other sectors for a time. With rapid economic growth and innovation, India has embraced the commercial potential of space technology.
Today, the space sector is no longer dominated by government initiatives alone. Private enterprises are driving innovation and commercial applications. Smaller-scale, commercially-driven space technology is proving its worth. Satellites provide critical information for applications ranging from agriculture and fishing to renewable energy.
Driven more by private enterprise than by gigantic government budgets, space technology is fulfilling smaller-scale, commercial purposes. Imaging systems feed information about the planet back to Earth, helping India’s farmers insure their crops or commercial fishing fleets track their catch. Satellites bring phone signals to the country’s remotest corners.
India’s Spacetech Ecosystem: A Bright Future
With government backing and a growing entrepreneurial spirit, India’s spacetech ecosystem is poised for significant advancements. Startups like AgniKul Cosmos, incubated at IIT Madras, exemplify the potential of Indian innovation. AgniKul is developing small-lift launch vehicles, like Agnibaan, capable of deploying payloads of up to 100 kg into orbit, showcasing India’s capability to compete in the global spacetech arena.
The Indian Space Research Organisation (ISRO) has been supportive of these startups, offering them access to its facilities and expertise. The startups’ success and collaboration potential have garnered attention not only within India but also internationally. As a result, India’s space startups are poised to play a significant role in the global space economy, capitalizing on their innovative solutions and partnerships to drive advancements in space technology.
Several startups are focusing on niche markets such as small satellite manufacturing, launch services, and remote sensing applications. By catering to specific needs within these segments, they aim to carve out a competitive edge. The startups are also engaging in partnerships and collaborations with international space agencies and companies to access expertise, technology, and funding.
As spacetech becomes increasingly competitive, both founders and investors have a unique opportunity to shape the future of space exploration. With its rich engineering talent and robust government support, India is well-positioned to lead the way in unlocking the vast potential of outer space. For investors, understanding the complexities of spacetech is essential, as this sector represents a frontier of innovation and opportunity that cannot be overlooked.
India’s Emergence as a Scientific Powerhouse
India’s achievements in spacetech are not only a source of national pride but also a critical factor in advancing global science and technology. These missions provide valuable insights into land profile dynamics, aiding in sustainable solutions, and contribute to understanding the evolution of the universe and celestial bodies. Spacetech has also transformed industries like agriculture, weather forecasting, urban planning, defense, and communication. Precision farming, satellite imagery for disaster response, and space-based monitoring for national security highlight its diverse applications.
India’s significance as a scientific powerhouse is gaining prominence on the global stage. During a recent meeting between President Biden and Prime Minister Narendra Modi, the leaders highlighted the need for enhanced commercial collaboration between their countries’ private sectors in the space economy. This collaboration, driven by space exploration, is a potential counterbalance to the influence of their mutual rival: China.
India becoming a signatory to the Artemis Accords and the focus on the space sector, particularly on addressing issues related to export control and technology transfer, during Prime Minister Narendra Modi’s recent visit to the US will open up doors for private players, industry leaders believe.
Challenges
India’s ambitious space endeavors are reaching new heights, but a notable discrepancy in funding between artificial intelligence (AI) and space technology highlights the need for increased investment. While AI startups received a staggering $3.24 billion in funding in 2022, the space tech sector secured only $108.52 million, expected to rise to $300 million in 2023. This disparity underscores the untapped potential in India’s space industry.
While the space tech sector faces this funding gap, there are key players actively investing in India’s space vision. Among them, Speciale Invest stands out as an organization dedicated to nurturing space tech startups since its establishment in 2017. Through strategic investments in companies like Agnikul Cosmos, Astrogate Labs, Kawa Space, GalaxEye, and Inspecity, Speciale Invest is driving innovation within India’s burgeoning space tech ecosystem.
Despite the immense growth potential in India’s space tech sector, it comes with unique challenges, such as the need for specialized engineering expertise and navigating complex technical and regulatory landscapes. However, these challenges also present opportunities to foster a deep talent pool at the intersection of academia and industry.
The Role of ISRO and Private Players
The Indian Space Research Organisation (ISRO) has been supportive of these startups, offering them access to its facilities and expertise. Since Prime Minister Modi’s announcement to open up the space sector to private enterprise, India has witnessed the emergence of a network of space start-ups. ISRO’s legacy of successful launches and efficient spaceports has laid a strong foundation for these private players. The agency’s workhorse rocket, with an impressive success rate, has significantly reduced satellite insurance costs, making India a competitive launch site.
In an exclusive interview, Vishesh Rajaram, Managing Partner at Speciale Invest, shared insights into the company’s mission. Speciale Invest believes in cultivating a culture of innovation in India by capitalizing on the nation’s deep expertise in science and technology. Rajaram highlighted the pivotal role of organizations like ISRO (Indian Space Research Organisation), IN-SPACe, and the Department of Science and Technology in driving growth within the space tech sector. These agencies provide essential support, talent, testing facilities, and policy frameworks for startups to thrive.
Former ISRO chairman A S Kiran Kumar highlighted the pivotal role of private investment in boosting India’s share of the burgeoning global space economy from its current 2-4 percent to an ambitious 20 percent. Speaking at the launch of LIBF EXPO 2024 in Gandhinagar, Kumar emphasized the need for increased participation from private entrepreneurs to capitalize on the projected $1 trillion space economy. India’s share in that economy, such as making launch vehicles or satellites, is just 2 to 4 per cent at present. If we want to capture a 20 per cent share in the future, we need to rope in a large number of private entities and entrepreneurs in this sector, he said.
He underscored the legacy of Dr. Vikram Sarabhai, the visionary architect of India’s space program, who laid the groundwork for leveraging space technology for societal benefit. Kumar cited examples of how satellite technology, championed by Sarabhai, has revolutionized disaster management, weather forecasting, and fisheries, ultimately improving the lives of millions. He praised Prime Minister Narendra Modi’s proactive embrace of space technology in governance, noting its transformative impact on administrative efficiency. The event served as a call to action for India to harness the potential of private enterprise to propel its space ambitions and secure a more significant foothold in the global space industry.
Startups Skyrocketing
Nevertheless, there are encouraging signs on the horizon. Notably, Google made its first foray into India’s space-tech sector in June, leading a $36 million Series B funding round for Pixxel, a Bengaluru-based startup. Additionally, Indian billionaire Anand Mahindra has thrown his support behind Agnikul Cosmos.
In another significant development, Skyroot Aerospace achieved a major funding milestone in the space technology sector in September 2022. The company secured $50.5 million in its Series B funding round, with Singapore’s GIC taking the lead. These investments signal growing interest and confidence in India’s space-tech ventures. In a spacious rocket hangar near Hyderabad, a hotbed for tech start-ups, young engineers at Skyroot Aerospace are meticulously working on a tiny, experimental cryogenic thruster engine. This same company successfully launched India’s first private satellite last year, symbolizing the impressive growth of the country’s space-tech start-ups.
The upcoming Vikram-1 launch by Skyroot Aerospace marks a historic milestone for India’s private space sector. This follows their remarkable achievement in November 2022, when they conducted the suborbital launch of Vikram-S, India’s first private rocket. The Kalam-250 rocket motor, a high-strength carbon composite system using solid fuel and advanced thermal protection, achieved an impressive sea-level thrust of 186 kN during its test, translating to a vacuum thrust of approximately 235 kN in flight.
Skyroot’s earlier successes include testing the Kalam-100, the third stage of Vikram-1, in June 2021. Co-founder and CEO Pawan Chandana hailed these advancements as the largest propulsion systems developed by India’s private sector, underscoring the technological leap with carbon-composite-built motors tested at ISRO. This progress aligns with their goal of achieving the maiden orbital launch of Vikram-1 in 2024.
Collaboration with ISRO’s Vikram Sarabhai Space Centre (VSSC) played a crucial role, providing the head-mounted safe arm for secure rocket operations. Additionally, the flex nozzle control system was validated during the latest tests, marking a critical step towards operational readiness. Skyroot remains focused on meeting upcoming milestones, reinforcing India’s growing prominence in the global spacetech arena.
Mumbai-based Manastu is developing green propulsion systems for satellites and hopes to validate its technology during a test flight in the coming year. It is also designing a fuel station in space to provide in-orbit refuelling service for satellites which otherwise have to be abandoned after the on-board fuel is exhausted.
In fact, India is now home to over 140 registered space-tech start-ups, a remarkable shift that is transforming the global space industry. Skyrocketing from just five start-ups during the pandemic’s onset, India’s space-tech sector has caught the attention of venture capitalists, driving explosive growth.
These start-ups foresee a massive market opportunity, with Pawan Kumar Chandana, the CEO of Skyroot Aerospace, projecting a demand for launching 30,000 satellites globally within this decade.
The startups’ success and collaboration potential have garnered attention not only within India but also internationally. As a result, India’s space startups are poised to play a significant role in the global space economy, capitalizing on their innovative solutions and partnerships to drive advancements in space technology.
Conclusion
Looking ahead, India’s space-tech sector is poised for exponential growth, with around 140 space startups expected to raise substantial capital. The sector’s market share is predicted to increase from 2% to 8% in the coming years. This growth aligns with the global shift towards increased private sector involvement in the space industry, termed “Space 4.0.”
As India’s space-tech sector continues to thrive, it’s clear that the country’s ascent in the global space business is just beginning. With a unique blend of government and private initiatives, India is poised to play an essential role in shaping the future of space exploration and technology. As it embarks on new frontiers, India’s journey to the stars is capturing the imagination of the world.
References and Resources also include:
https://analyticsindiamag.com/indias-space-techs-dont-get-enough-investments/
