The Modi government's decision to open up the space and nuclear sectors to private participation has been described as unexpected and revolutionary, according to Minister Jitendra Singh. These reforms are seen as key to India's growth and development, fostering innovation, attracting investment, and positioning the nation as a global powerhouse in these strategic areas.

Space Sector Liberalization

Under Prime Minister Narendra Modi's leadership, India's space program has transitioned from a regulated, government-dominated sector to a vibrant, inclusive ecosystem that encourages startups and private sector involvement. This shift began with the Union Cabinet's decision in June 2020 to allow Indian private sector companies to participate in space activities as co-travelers. This move shifted the approach from a "supply-based model" to a "demand-based model," fostering a more dynamic and responsive space economy.

The establishment of the Indian National Space Promotion and Authorization Centre (IN-SPACe) has streamlined private sector participation, enabling faster innovation, cost efficiency, and global competitiveness. These reforms have opened doors for domestic and international players, positioning India as a key contender in the global space economy. The government has also implemented liberalized policies, including allowing 100% Foreign Direct Investment (FDI) in satellite operations (with approvals), tax incentives, and the Production-Linked Incentive (PLI) scheme. The PLI scheme has bolstered domestic manufacturing of satellite components, propulsion systems, and payloads, reducing reliance on imports and positioning India as a technology exporter.

These initiatives have attracted global investment, strengthened supply chains, and enhanced India's competitiveness in the commercial space market. The space sector is seen as a vital element in strengthening the country and achieving the target of 'Developed India-2047'.

Nuclear Sector Reforms

The Modi government is also undertaking significant reforms in the nuclear energy sector, with the goal of achieving 100 GW of nuclear power capacity by 2047. To facilitate this, the government is considering amendments to the Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act to allow private sector participation in nuclear power generation.

These changes aim to address long-standing structural constraints that have limited the sector's growth. The Atomic Energy Act currently centralizes the construction and operation of nuclear plants under the Nuclear Power Corporation of India Limited (NPCIL), effectively barring private players. Meanwhile, Section 17(b) of the CLNDA imposes supplier liability beyond global norms—discouraging foreign vendors since the Act's inception in 2010.

The proposed reforms seek to limit supplier liability in line with international practices and permit private sector participation in reactor projects, albeit under NPCIL supervision. The government is also considering regulatory reforms and is evaluating the model of Indian National Space Promotion and Authorization Center (INSPACe) which acts as the promoter and regulator for the space sector that was opened up for private participation in 2020. To further boost the nuclear sector, the government has announced a Nuclear Energy Mission for research and development of Small Modular Reactors (SMRs) with an outlay of Rs 20,000 crore and to operationalize five indigenously developed SMRs by 2033.

Impact and Future Outlook

The opening up of the space and nuclear sectors is expected to have a significant impact on India's economy and technological capabilities. In the space sector, the increased private sector participation has led to a surge in startups and innovation, with funding for space start-ups rising from $118 million in 2022 to $126 million in 2023. Similarly, the entry of private players into the nuclear sector is expected to accelerate growth and innovation, leading to a major shift in energy security.

Dr. Jitendra Singh has expressed confidence that the nuclear sector will experience similar growth and innovation as the space sector, leading to a major shift in energy security. By expanding nuclear energy as a sustainable, scalable, and secure power source, the government aims to bolster energy security and meet the nation's long-term economic and environmental goals. The reforms in both the space and nuclear sectors reflect the Modi government's commitment to transforming India into an innovation-driven economy and a global leader in these strategic domains.