The following piece is part of the U.S.-India AI Fellowship Program’s short-form series.
By: Mandeep Rai
As leading nations in the final frontier, India and the United States (U.S.) share a legacy of space collaboration since the formation of the Indian National Committee for Space Research (INCOSPAR) in 1962, when India launched its first sounding rockets from Thumba with U.S. support. The enduring partnership expanded through pathbreaking projects like the Satellite Instructional Television Experiment (SITE) using NASA’s ATS-6, followed by the Indian National Satellite System (INSAT). Although India’s non-alignment policy and tilt towards the erstwhile Soviet Union briefly stalled cooperation, post-Cold War ties have revived significantly. 2004 marked a ‘space renaissance’ moment for India when two professional societies carved the plan for providing opportunities to rebuild strategic partnerships in the space sector. The political decision establishing the Civil Space Joint Working Group (CSJWG) in 2005 gave way to joint ventures in the following years. It focused on lunar exploration, satellite navigation, and Earth observation, including Chandrayaan-1, NISAR (NASA-ISRO Synthetic Aperture Radar), Mars exploration, and India’s participation in the Artemis Accords.
As prime players in the New Space era, both countries are charting a new frontier under the Initiative on Critical and Emerging Technologies (iCET) framework, strengthening collaboration across civil, security, and commercial sectors. During Indian prime minister Narendra Modi’s U.S. visit in February 2025, the iCET was rebranded as Transforming Relations Utilizing Strategic Technologies (TRUST) to advance cooperation in space in addition to defense, Artificial Intelligence (AI), semiconductors, and biotechnology. Strengthening their collaborative footprint in space, two Indian Space Research Organisation (ISRO) astronauts are set to undergo training at the National Aeronautics and Space Administration (NASA), paving the way for the maiden joint U.S.-India mission to the International Space Station (ISS) aboard the Axiom-4 mission scheduled this year. The upcoming launch of the NASA-ISRO Synthetic Aperture Radar (NISAR) satellite this year is geared to significantly advance capacities in disaster management, climate change monitoring, and infrastructure assessment across the globe. A proposed ‘Space Innovation Bridge’ under the India-U.S. Defense Acceleration Ecosystem (INDUS-X) aims to foster U.S.-India startup partnerships in satellite technology and space situational awareness. The growing space cooperation in defense deepens with India’s participation in the U.S. Space Command’s Global Sentinel exercise and ongoing missile technology export reviews to support commercial satellite launches, reinforcing their role as prominent players in the growing space economy.
Insight into the Space Economy
The latest estimates from the space report peg the global space economy at US$570 billion. In 2023, the United States led the largest single space budget by far, yet its share of the global space budget decreased from over 75% in 2000 to 60% in 2023. The Indian space economy is currently valued at approximately US$8.4 billion, constituting a 2% share of the global space market. India envisions scaling the space economy to US$44 billion by 2033, including US$11 billion in exports, amounting to 7-8% of the global share. Notwithstanding the budget constraint, ISRO, with a 15 times smaller budget than NASA, has demonstrated some distinguished accomplishments, namely the Chandrayaan-3 Mission and SpaDeX.
The Organisation for Economic Co-operation and Development’s (OECD) outlook for the space economy till 2040 reflects that the transformation of the space sector needs partnerships across countries to address mutual challenges, developing the apt contracts for commercial and public missions to ensure a safe space environment. In the same vein, the space economy for both nations is crucial and thrives on collaboration, innovation, and a collective vision. Amid evolving trade challenges, the need for a cohesive and collaborative strategy becomes even more compelling to advance the shared space ambitions of the United States and India.
Effects of Tariffs
The looming threat of potential tariffs on Indian imports raises the question of whether the space sector will withstand the effect. The Union Budget 2025-26 in India reduced the customs duties on ground installations and satellite launches, along with goods for the manufacturing of launch vehicles, lowering the input costs and enhancing manufacturing and exports. India has strategically shielded its space sector from tariff-related disruptions, maintaining resilience against escalating global trade tensions, according to Pawan Kumar Goenka, Chairman of IN-SPACe. He highlighted that substantial reductions in tariffs on satellite launches, ground infrastructure, and launch vehicle components have positioned India’s space industry with a distinct competitive advantage in global sourcing. While minor procedural challenges persist concerning the import of certain components, Goenka emphasized that India’s space sector remains largely unaffected by the retaliatory tariffs affecting other industries. The space tech industry experts applauded the resilience towards these shocks and see it as a combination of strategic sourcing, strong policy, support, and expanding global partnerships.
As with any interdependent ecosystem, the space sector too is vulnerable to cascading impacts across its entire value chain, ranging from the procurement of raw materials to the fabrication of radiation-hardened components, posing a risk of detrimental effects for national space agencies and private enterprises. Escalating costs associated with government-backed initiatives, such as the Mars Mission and NISAR, threaten to delay project realization even further, compounding existing challenges. At the same time, the economic pressures risk diminishing startup competitiveness, constraining access to capital, and ultimately slowing the momentum of transformative innovation within the global space economy. However, given that both nations value space partnership as a future-focused area, there is a strong need to shield it from any indirect tariff shocks through diplomatic engagements, exclusive exemptions, readjusting trade, and technological frameworks for taking forward a smooth sail in space partnership.
AI and Space: Missed Opportunities.
The space sector is witnessing a seamless fusion of AI and space technology, making strides in ground-breaking advancements in mission planning, autonomous navigation, astronomical dataset analysis, robotics, and Earth observation. However, several untapped opportunities in space continue to exist for both countries where AI can be leveraged, particularly in energy solutions for space missions and space mining technologies.
In addition to the existing subsystems of the satellite, future satellites will be equipped with advanced edge computing and built-in AI infrastructure — such as Graphics Processing Units (GPUs) and algorithms — to provide edge intelligence on the fly. To enable this, power remains a crucial design factor. Beta radiations from isotopes like tritium and nickel 63 can be alternatives for overcoming the power challenges in AI-enabled satellite design. NASA plans to utilize this breakthrough in ultra-high energy density batteries for diverse future applications, including deep-space missions, CubeSATs, autonomous power systems for spacecraft, and SATCOM (Satellite Communications) networks. A promising avenue for collaboration while strengthening energy security in space lies in the co-development and sharing of beta-voltaic battery technology for AI-enabled deep space missions that offer a volumetric energy density nearly 100 times greater than that of conventional lithium-ion batteries when considered over a 20-year lifespan.
AI has emerged as a key enabler for an ambitious area of space mining. While ISRO’s current focus remains on lunar and Martian exploration, India, as a signatory of the Artemis Accords backed up by its strengthening AI ecosystem, is well-positioned to explore the growing area of asteroid mining. India has proven capability in developing cost-effective space technologies (showcased through the SpaDeX mission and ADITYA L1), advancements in propulsion, material science and robotics. Combined with a robust space research pool and AI talent, these strengths provide a solid foundation for space mining capability. Developing advanced algorithms on existing hyperspectral and telemetry data, while integrating Chandrayaan and NASA’s OSIRIS-Rex datasets, is a unique opportunity to be grabbed for creating predictive AI models for prospecting asteroids. Both countries can also explore intelligent mining solutions and in-situ resource utilization to optimize various processes for extraction and refining through the development of next-generation radioisotope thermoelectric generators that use heat as a source of energy. As global interest in asteroid mining intensifies, driven by its race towards rare minerals, India and the United States must gain a strategic incentive to position bilaterally as key players in this next frontier of AI-enabled space exploration.
Conclusion
The trajectory of India-U.S. collaboration holds immense strategic and technological value in the present global security landscape and the Indo-Pacific. Fostering a vibrant and resilient space ecosystem that drives innovation, deepens collaboration, and builds a sustainable value chain is no longer optional but imperative. As Space 2.0 rapidly evolves amid unprecedented technological disruption and AI emerging as a force multiplier, both India and the United States must adopt an avant-garde approach that is bold, adaptive, and future-ready. With the new space age completing a quarter century, the near future demands more than visionary statements. It calls for actionable strategies, agile execution, and meaningful partnerships for the two countries as key anchors of building an open and inclusive Indo-Pacific economy. To stay ahead, both countries must walk beyond diplomatic posturing, mobilize stakeholders, and translate ambition into real impact, crafting a legacy defined by a collective AI vision for space advancement.
Mandeep Rai is part of the U.S.-India AI Fellowship Program at ORF America. He is currently the Director of the Satellite Control Centre for the Government of India.