In a week, India will start test flights for its Gaganyaan space project, whose objective is to send three crew into a 400-kilometre-high orbit (the same as the International Space Station) for a three-day mission.

In September, it launched an exploratory spacecraft to study the sun. The previous month, it became only the fourth country to achieve a soft landing on the moon and the first to do so in the lunar south pole region.

India is setting down markers to show that it is a serious space nation, even though its share of the global space economy is only about 2% and allocation for space in the government's budget for the fiscal year ending March 2024 is a modest USD1.5bn.

Yet, the Indian space program will continue to grow, with a notable feature set to be increased participation by the private sector.

Private Companies
In 2020, Prime Minister Narendra Modi's government approved private participation in the country's space industry. The move spurred a rapid expansion in space-related start-ups, now thought to number between 150 and 200.

In 2022, Indian space start-ups raised around USD112mn in venture and private equity funding, according to research firm Tracxn.

A handful of companies dominate the sector. They include the Hyderabad-based Skyroot Aerospace, which launched India's first privately developed rocket with the support of the Indian Space Research Organisation (ISRO last November, and the Bengaluru-headquartered Pixxel, which has set out a mission to build the world's first hyperspectral satellite constellation.

Six months ago, ISRO released a new “Indian Space Policy” building on the 2020 policy. This includes a long-term strategy focusing on R&D and technology transfer to private sector space-tech start-ups. These are singled out for a key role in burnishing India's credentials as a top manufacturing, launch and operations hub for space.

Delhi wants the private sector to span the space economy's entire value chain across what it grandiloquently describes as 'the creation and operation of space objects, ground-based assets and services including communication, remote sensing and navigation.'

Key Responsibilities
The Indian Space Policy, which will be overseen by the Department of Space (DoS), demarcates the responsibilities of three key agencies.

ISRO—The primary focus for ISRO will be R&D, especially in relation to space infrastructure, space transportation, space applications, capacity building and human spaceflight. The agency will share technology with public and private sector companies and make data from its remote-sensing satellites openly accessible.

ISRO is expected to develop a long-term roadmap for "sustained human presence" in space.

Indian National Space Promotion and Authorization Centre—The Indian National Space Promotion and Authorization Centre (IN-SPACe), an autonomous agency under the DoS, will approve and guide space-related activities. It will promote industry clusters for the space sector and work to ensure that India is seen as a preferred service provider within the sector globally.

In July, IN-SPACe invited expressions of interest regarding an initiative involving the transfer of technology to build the ISRO-developed small satellite launch vehicle, which can launch satellites weighing up to 500 kilograms into low-earth orbit.

NewSpace India Limited—The DoS-administered NewSpace India Limited (NSIL), ISRO's commercial arm, will concentrate on commercial agreements relating to space technologies and platforms established through public expenditure. It will manufacture, procure or lease key components and assets from the public or private sector as necessary.

NSIL was established to support scaling up the Indian space program's high-tech manufacturing base.

FDI And Expanding Reach
India will count on further reform of its space industry, including adjusting rules on foreign direct investment (FDI) in the sector, to help expand its share of the global space market.

It aims for that share to increase to 9% by 2030.

A proposal to ease FDI rules in space-related manufacturing and operations is in the pipeline.

India is set to allow up to 74% foreign ownership through the automatic route (i.e., not requiring prior government approval) and up to 100% through the government approval route. Delhi already allows 100% foreign ownership via the government route in the satellite subsector.

U.S. Collaboration
India will collaborate closely with the United States on human spaceflight.

In June, during an official state visit by Modi to the United States, India became the 27th signatory to the Artemis Accords, which the US State Department and NASA drafted to strengthen cooperation on the civil exploration and use of outer space.

NASA plans to train Indian astronauts for a joint mission to the International Space Station.

Meanwhile, NASA has delivered the science payload for the NASA-ISRO Synthetic Aperture Radar, an advanced Earth imaging system set for launch next year, to India. ISRO will provide the satellite bus, launch vehicle and launch services.

Even while remaining closely aligned with the U.S. space program, India will pursue space-tech collaboration with other friendly countries. As global demand for low-cost Indian space products and services grows, Delhi will accelerate opening its space industry to foreign investment.