India Aims At $447 Bn Space Economy Amid China & Russia's Isolation

India is squeezing its way into the increasingly lucrative space business, capitalising on China and Russia's geopolitical isolation to position itself as a reliable option to SpaceX.

Last month, state-owned NewSpace India launched three dozen communications satellites for OneWeb from an island off India's eastern shore. The decision not only saved the UK satellite company's attempt to build a global broadband internet network in the sky but also signalled India's intentions in the sector. 

Demand for high-speed internet delivered from space has made satellite launch a profitable industry. According to Ernst & Young, the space economy is expected to expand to USD 600 billion by 2025, up from USD 447 billion in 2020.

Given their long-running state space projects, Russia and China, along with Elon Musk's SpaceX, have been the primary providers of satellite launches. 

However, due to the Ukraine conflict and Beijing's tensions with the US, they are now off-limits to many potential consumers. After Russia sabotaged the initial launch last year, taking 36 of OneWeb's spacecraft hostage, the company turned to India.

Simultaneously, France's Arianespace has encountered difficulties in getting its newest rocket available for use. And, following a launch failure in January, Virgin Orbit Holdings, the satellite-launch firm linked to British billionaire Richard Branson, announced last week that it was suspending operations indefinitely.

“If SpaceX is full, busy, or expensive, you have to look elsewhere — and you can't look to China, they cannot collaborate with North America, and the United States drives the majority of demand,” Dallas Kasaboski, the senior analyst at Northern Sky Research, a space research and consulting company, said.

“India is in a much better place politically,” he said.

Many satellite operators are avoiding Chinese rockets, partially due to growing concerns about Beijing gaining access to Western technology. In comparison, India has moved closer to the US and other regional powers, including Australia and Japan and its launches are less expensive than those of competitors.

Developing the space sector is a critical component of Prime Minister Narendra Modi's “Make in India” campaign, which seeks to position India as a top location for technological innovation. By encouraging the development of startups, his administration has attempted to make India's space agency more business-friendly.

“Demand is extremely high, the heavy-lift launchers that will be required will be in short supply,” said D Radhakrishnan, chairman and managing director of NewSpace, which was established in 2019 as the commercial arm of India's national space organisation, India Space Research Organisation.