India’s space industry funding collapsed by 55 pc in 2024

Poor funding threatens India’s ambitious space goals

Business

Defence & Aerospace

January 15, 2025

/ By / New Delhi

India’s space industry funding collapsed by 55 pc in 2024

Experts suggest that the funding slump in India is part of a larger trend in the global industry

India’s space industry, which has captured global attention due to its landmark missions and ambitious plans, is facing a significant setback. Funding in the sector plunged by 55 pc in 2024, the first decline in over five years, poses a serious challenge for India’s long-term goals to become a global space leader, especially with its target of reaching a USD 44 billion market by 2033.

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With capabilities to launch its own satellites and several landmark space missions, for long India has been one of the global leaders in space exploration. However, despite several high-profile successes, funding in India’s space sector has taken a significant hit.

According to a report by Tracxn, a market intelligence platform, funding in India’s space industry plummeted by 55 pc in 2024, dropping to USD 59.1 million from USD 130.2 million in 2023.

Notably, it marks the first funding drop in India’s space sector in at least five years, following a period of consistent growth that saw Indian space start-ups raise USD 353.5 million across 72 funding rounds from 2020 to 2024.

Globally, space companies raised approximately USD 28 billion over the last five years, while Indian space firms secured about USD 354 million in the same period, according to Tracxn data. Experts suggest that the funding slump is part of a larger cyclical trend in the global space industry, where investment tends to dip as companies pass through phases of development and technological maturation.

“The decline aligns with the natural investment cycles of the industry. As leading companies approach critical milestones in 2025, investment activity is likely to pick up,” said Pawan Chandana, Founder of Skyroot Aerospace, an aerospace company specialising in futuristic space-launch vehicle design and building in an interview with Reuters.

For India however, this drop in funding presents a significant challenge to its aspirations of becoming a global leader in space. The government has set ambitious plans to build an integrated satellite communication grid, with spacecraft positioned in different orbits and advanced data relay systems. According to its vision, India also aims to reach a USD 44 billion market size in the space sector by 2033.

Additionally, on January 8, Air Vice Marshal Pawan Kumar announced that the Defence Space Agency is looking to collaborate with the private sector to enhance India’s defense capabilities in space.

Afaq Hussain

Afaq Hussain

“While this may be a temporary disruption, the sector in India will face challenges towards achieving the envisaged goals of reaching the USD 44 billion market. Consistent funding is key to achieving industry goals, and this decline does not align the sector with its goals. The funding decline would have an impact on planned missions and launches,” Afaq Hussain, Director at the Bureau of Research on Industry and Economic Fundamentals (BRIEF), a public policy research and consulting organisation, tells Media India Group.

“Research and innovation are key to the space sector and regular funding is important to continue these activities for the sector. The delays/decline in funding restricts the research and innovation which in turn will have an impact on future space missions and explorations on India. The impact would be in the form of delays, lower technology advancements, lesser number of launches and reduced influence of India in global space policy. Private sector or international funders’ sentiment may also get impacted due to this decline in funding,” he adds.

Despite these challenges, there is cautious optimism in the sector. The Indian Space Research Organisation (ISRO) has projected a 20-30 pc increase in its budget to support deep space exploration and heavy-lift rockets. Additionally, the government has taken steps to support the industry, approving a USD 119 million fund in October 2024 to bolster space startups.

Hussain also pointed out that the sector’s growth is heavily dependent on private sector participation, which plays a critical role in international collaborations, ISRO’s program launches, and other initiatives that are key to maintaining positive momentum. The private sector’s participation in public-private partnerships, as well as strategic international alliances with countries like the US and Japan, will be crucial for the revival of the sector.

In a statement released in March 2024, Union Minister Jitendra Singh said, four-five years back, we had just one digit Start-up in the Space sector, today we have nearly 200 private Space Startups after opening up of the sector while the earlier ones of them have even turned entrepreneurs.

There has been an investment of over INR 10 billion by private space start-ups in the current financial year from April to December 2023, he adds.

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