As leading nations in space, India and the United States have shared a legacy of collaboration since the formation of the Indian National Committee for Space Research 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 using NASA’s ATS-6, followed by the Indian National Satellite System.
Although India’s nonalignment policy and tilt toward the Soviet Union briefly stalled cooperation, post-Cold War ties have revived significantly. The year 2004 marked a renaissance moment for India when two professional societies crafted the plan for providing opportunities to rebuild strategic partnerships in the space sector. The decision to establish the Civil Space Joint Working Group in 2005 led 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 framework, strengthening collaboration across civil, security and commercial sectors. During Indian Prime Minister Narendra Modi’s U.S. visit in February 2025, the framework was rebranded as Transforming Relations Utilizing Strategic Technologies 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 began training at NASA, which paved the way for the maiden joint India-U.S. mission to the International Space Station as part of Axiom-4. The July 2025 launch of NISAR was 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 aims to foster India-U.S. 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 exercises 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 in The Space Report from the nonprofit Space Foundation peg the global space economy at $570 billion. In 2023, the United States had the largest space budget by far, yet its share of the global space budget decreased from more than 75% in 2000 to 60% in 2023. The Indian space economy is currently valued at about $8.4 billion, constituting a 2% share of the global space market. India envisions scaling the space economy to $44 billion by 2033, including $11 billion in exports, amounting to 7%-8% of the global share. Notwithstanding the budget constraint, ISRO, with a budget that is less than 7% the size of NASA’s, has demonstrated distinguished accomplishments, such as the lunar exploration Chandrayaan-3 mission and SpaDeX, an ISRO twin-satellite mission launched in 2025.
The outlook for the space economy through 2040 by the Organisation for Economic Co-operation and Development, a global policy forum, reflects that the transformation of the space sector needs partnerships across countries to address mutual challenges, developing contracts for commercial and public missions to ensure a safe space environment. Also, 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 U.S. and India.
Durga Puja festival in Kolkata, India, in September 2025.
HINDUSTAN TIMES VIA GETTY IMAGES
Minimal tariff effects
The 2025-26 Union Budget 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 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, or the Indian National Space Promotion and Authorization Centre. Goenka said 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 tariffs affecting other industries. Space tech industry experts applauded the resilience over these shocks and see it as a combination of support, strategic sourcing, strong policy and expanding global partnerships.
As with any interdependent ecosystem, the space sector is vulnerable to cascading impacts across its value chain, ranging from procuring raw materials to fabricating radiation-hardened components, which poses 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 projects even further, which compounds existing challenges. At the same time, 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 India and the U.S. value space partnership, there is a strong need to shield it from any indirect tariff shocks through diplomatic engagements, exclusive exemptions, readjusting trade, and technological frameworks.
AI and space: missed opportunities
The space sector is witnessing a seamless fusion of AI and space technology, making strides in groundbreaking 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 computing and built-in AI infrastructure — such as graphics processing units and algorithms — to provide intelligence on the fly. To enable this, power remains a crucial design factor. Beta radiation from isotopes like tritium and nickel 63 can be alternatives for overcoming the power challenges in AI-enabled satellite design. NASA plans to use this breakthrough in ultrahigh energy density batteries for diverse future applications, including deep-space missions, CubeSats, autonomous power systems for spacecraft and satellite communications networks. A promising avenue for collaboration lies in the development and sharing of technology for AI-enabled deep-space missions, with energy potentially 100 times greater than that of conventional lithium-ion batteries 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 it can develop cost-effective space technologies (showcased through the SpaDeX mission and Aditya L1 solar mission), 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 for creating predictive AI models for prospecting asteroids. Both countries also can explore intelligent mining solutions and in situ resource utilization to optimize 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 toward rare minerals, India with the U.S. must gain strategic advantage by working 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 global security landscape and in 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 with AI emerging as a force multiplier, both India and the U.S. must adopt an approach that is bold, adaptive and future-ready.
About the author: Mandeep Singh Rai is part of the U.S.-India AI Fellowship Program at Observer Research Foundation (ORF) America. He is the director of the Defence Satellite Control Centre for the government of India. This article was reprinted with permission from ORF America and edited to meet space and style requirements.