President Droupadi Murmu visits the space exhibition with Union Minister of State for Science and Technology Jitendra Singh and ISRO Chairman S Somanath during the first National Space Day celebrations to commemorate the successful landing of the ‘Vikram’ Lander on the surface of the Moon, in New Delhi on August 23, 2024.
| Photo Credit: ANI

India’s space sector has directly contributed about $24 billion (₹20,000 crore) to India’s Gross Domestic Product over the last decade. It has directly supported 96,000 jobs in the public and private sector. For every dollar produced by the space sector, there was a multiplier effect of $2.54 to the Indian economy and India’s space force was 2.5 times “more productive” than the country’s broader industrial workforce.

These “preliminary findings” were part of a presentation by Steve Bochinger, Affiliate Executive Advisor, Novaspace, a European consultancy at the National Space Day celebrations in New Delhi on Friday (August 23, 2024).

The Space Day celebrations are to commemorate the first anniversary of the successful landing of the Chandrayaan-3 on August 23 last year.

The report was “initiated” by the Indian Space Research Organisation (ISRO), Mr. Bochinger said, to evaluate the socio-economic impact of the space sector from 2014-2023 and the study was conducted by Indian economics research firm econONE and Novaspace. The team interviewed representatives from 56 Indian organisations in public and private sectors.

“India’s space sector has benefitted from decades of consistent investment… with $13 billion invested in the last decade it is the 8^th largest space economy (in terms of funding) in the world,” said Mr. Bochinger.

The Indian space sector was diversifying and now had 700 companies including 200 start-ups and had seen revenues grow to $6.3 billion in 2023, which was about 1.5% of the global space market.

Satellite communications contributed 54% to the space economy, followed by navigation (26%) and launches (11%). The main industries supported by the space sector were telecom (25%), information technology (10%) and administrative services (7%), the report highlighted. The complete report and the methodology used were not made public as of Friday evening.

Companies that the firm spoke to said that India’s progress in space had yet to significantly benefit their own profitability but change was in the air. “Stakeholders say that the space sector has largely contributed to the nation’s prestige, sovereignty and international leadership but lesser impact on say, competitiveness, access to new markets etc. (They say) that’s because in the last decade the space programme has been driven by political considerations but this is expected to change as commercial space is a becoming a key priority area,” said Mr. Bochinger, “Regulatory reforms that have been made are yet to realise their full effect. An under-developed venture capital ecosystem is hampering space technology start-ups from accessing capital.”

The ADB’s growth forecast for India for FY25 is in line with the projections made by the Reserve Bank of India.
| Photo Credit: REUTERS

The Asian Development Bank (ADB) on Thursday raised India’s GDP growth forecast for the current fiscal to 7 per cent from 6.7 per cent earlier, saying the robust growth will be driven by public and private sector investment demand and gradual improvement in consumer demand.

The 2024-25 growth estimate is, however, lower than 7.6 per cent projected for the 2022-23 fiscal. Strong investment drove GDP growth in the 2022-23 fiscal as consumption was muted, the ADB said.

The ADB had in December last year projected the Indian economy to expand 6.7 per cent in the 2024-25 fiscal.

“The economy grew robustly in fiscal 2023 with strong momentum in manufacturing and services. It will continue to grow rapidly over the forecast horizon. Growth will be driven primarily by robust investment demand and improving consumption demand. Inflation will continue its downward trend in tandem with global trends,” said the April edition of the Asian Development Outlook released on Friday.

Growth will be robust despite moderating in FY2024 and FY2025, it said. For the 2025-26 fiscal, the ADB has projected India’s growth at 7.2 per cent.

The ADB said exports are likely to be relatively muted this fiscal as growth in major advanced economies slows down but will improve in FY2025.

“Monetary policy is expected to remain supportive of growth as inflation abates, while fiscal policy aims for consolidation but retains support for capital investment. On balance, growth is forecast to slow to seven per cent in FY2024 but improve to 7.2 per cent in FY2025,” it said

To boost exports in the medium term, India needs greater integration into global value chains, the ADB added.

The ADB’s growth forecast for FY25 is in line with the projections made by the Reserve Bank of India (RBI).

The RBI last week had said GDP growth in the current fiscal is projected at seven per cent on expectations of normal monsoon, moderating inflationary pressures and sustained momentum in manufacturing and services sectors.

 India’s dominant services industry grew faster in March 2024 amid strong demand, according to a private business survey that also showed employment increased at the fastest rate in seven months and export business expanded at a record pace.
| Photo Credit: The Hindu

Sales and business activity in India’s Services sectors clocked their biggest expansion in over 13 and a half years in March, bolstered by a record uptick in export orders, as per the HSBC India Services Purchasing Managers’ Index (PMI) which rose to 61.2 to 60.6 in February. A reading of more than 50 on the index indicates growth in activity levels.

With fresh work orders increasing capacity pressures at service providers, they raised employment levels at the joint-fastest pace since November 2022 and the highest pace since August 2023. On the flip side, input costs as well as charges levied on customers grew at a faster pace, with output charges raised at the highest rates since July 2017.

Barring real estate and business services, input costs and output charges rose at a stronger pace for all sectors, with the highest input cost inflation seen in Consumer Services and Finance & Insurance seeing the steepest surge in selling prices. Firms surveyed for the index reported higher labour and material costs as key challenges.

Though business sentiment levels remained positive, they slipped to a four-month low in March, with some concerns emerging about competitive pressures. “India’s services PMI rose in March, following a small dip in February, on the back of strong demand that spurred sales and business activity,” said Ines Lam, HSBC economist.

Finance & Insurance services saw the highest increase in output and sales. New export business rose at the fastest rate since the PMI series started in September 2014, with firms noting gains in orders from Africa, Asia, Australia, Europe, the Americas and the Middle East.

With the Manufacturing PMI also reporting a sharp uptick in March, overall private sector output grew at the second-highest pace in 13.5 years, slightly lower than the upticks recorded in July 2023. The HSBC India Composite PMI Output Index rose from 60.6 in February to 61.8 in March.

Services firms reported higher increases in expenses, and also contributed more than factories towards selling price inflation, which quickened to a five-month high.