The Long Delay on India’s Space Act: A Threat to Private Investment

The Indian government has been deliberating over the creation of a comprehensive legal framework for its space industry for nearly a decade. This lack of a Space Act, which would provide statutory backing to the regulatory framework established by IN-SPACe and the Indian Space Policy 2023, is no longer just an oversight but a pressing concern for private investors.

India’s decision to open its space sector in 2020 was seen as a bold move. The government created IN-SPACe to authorize and regulate non-governmental entities, while the Indian Space Policy 2023 clarified the regulatory framework, enabling private participation across the space value chain. However, this policy architecture has moved ahead of legislation, leaving a gaping hole in statutory backing for the sector.

This development reflects a worrying trend where governments struggle to keep pace with emerging industries. The US has built its space framework through multiple Acts covering various aspects of space activities. In contrast, India’s delay in passing the Space Act threatens to create structural problems for the sector.

The absence of a clear regulatory framework raises fundamental questions about IN-SPACe’s powers and the process by which authorizations are granted or withdrawn. Liability, insurance, financial guarantees, ownership, and transfer of space assets remain unclear, leaving private investors with uncertainty rather than clarity.

The draft Space Activities Bill released in 2017 acknowledged the need for a legal environment that would enable further growth of the sector and facilitate private participation under government authorization and supervision. However, this bill has been stuck in limbo, with revisions and consultations dragging on for years. The latest reports suggest that a revised draft is nearing completion, but it remains to be seen whether this will address pressing concerns of stakeholders.

The Indian Space Policy 2023 aimed to establish a regulatory framework and enable private participation across the space value chain. While policy documents outline intentions and procedures, they lack the legally binding power of a statute. A statutory law would provide clarity on issues such as authorizations, liability, insurance, and financial guarantees, crucial for private investors.

The delay in passing the Space Act is not just an inconvenience but a threat to the growth and stability of India’s space industry. Private companies require clear guidelines and regulations to operate effectively, and the absence of a comprehensive legal framework creates uncertainty that can deter investment. The Indian government must prioritize the passage of the Space Act to provide a stable regulatory environment for private investors.

In the meantime, stakeholders wait with bated breath for the revised draft bill. As the sector continues to expand, the need for clarity and certainty grows more pressing. It is imperative that the government takes concrete steps towards passing the Space Act to ensure India’s space industry reaches its full potential.

The parliamentary Standing Committee’s report in March 2026 highlighted the “clear and pressing need” for a comprehensive legal framework given the sector’s expansion, strategic, and security implications. The committee welcomed the move towards drafting the Bill but emphasized the need for expedited action.

It is now up to the government to demonstrate its commitment to creating a stable regulatory environment for India’s space industry. The passage of the Space Act would not only provide clarity on key issues but also send a strong signal to private investors that India is serious about developing its space sector.

The world looks on as India’s space industry waits with bated breath for the clarity and certainty that only a comprehensive legal framework can provide. The government has an opportunity to create a stable regulatory environment, but it must seize it quickly before the delay becomes a structural problem that threatens the very growth of the sector.