India's Space Tech Sector Poised for Major Growth: Treelife Report

India's space technology sector is experiencing a rapid transformation, driven by a surge of innovative homegrown startups and significant investments. Treelife, a professional multidisciplinary services firm, has released a comprehensive report offering deep insights into the current state and future potential of this dynamic industry.

The report reveals that over 523 private companies and research institutions are now actively contributing to India’s space economy, which is projected to reach USD 44 billion by 2033. This would give India nearly 10 per cent of the global market share. To support this growth, the government has allocated USD 1.6 billion to the Department of Space, which oversees the Indian Space Research Organisation (ISRO) and other space-related activities.

One of the key findings from Treelife’s report is the significant increase in private investments in space tech since 2014. By July 2023, private investments had reached USD 233 million across more than 30 deals. Notably, 2023 saw a peak in private sector investments, with USD 124.7 million injected into the sector. This trend highlights a growing interest in areas such as satellite manufacturing, launch services, earth observation and analytics, propulsion systems and integrated space solutions.

Treelife’s report also delves into the foreign direct investment (FDI) landscape. Current policies allow up to 100 per cent foreign investment in satellite establishment and operation through the government route. Proposed amendments aim to further liberalise the sector, although some ambiguities regarding compliance with sectoral guidelines and definitions remain.

To bolster private participation, the government has introduced several tax incentives. These include GST exemptions for satellite launch services and income tax exemptions for R&D expenditures. Supportive schemes like the Startup India Seed Fund Scheme, the Technology Development Fund under DRDO, iDEX (Innovations for Defence Excellence) and the Atal Innovation Mission (AIM) further stimulate growth and innovation in the sector.

GIFT City (Gujarat International Finance Tec-City) is emerging as a global gateway for space tech companies. It offers a favourable regulatory environment, advanced infrastructure, and robust ecosystem support, facilitating funding, international collaboration, and regulatory assistance. This makes GIFT City an ideal hub for space tech companies looking to scale their operations.

Garima Mitra, Co-Founder of Treelife, said that the Indian space tech sector is poised for significant growth, driven by increased FDI, public-private partnerships, advanced technologies, and upcoming incentives. “Treelife’s report marks a significant milestone in understanding the intricacies of India’s space tech landscape, providing critical insights that will guide stakeholders in navigating the regulatory environment and maximising opportunities for growth and innovation. We remain committed to helping startups understand the regulatory landscape and function accordingly,” Mitra added.

As India’s space tech sector continues to evolve, the insights from Treelife’s report will be invaluable for stakeholders aiming to capitalise on the opportunities within this burgeoning industry.