Lower launch costs, indigenous manufacturing of critical space-grade materials and a stronger focus on satellite-based applications will be essential if India is to achieve its goal of becoming the world's third-largest space economy, a senior Department of Telecommunications (DoT) official said on Wednesday.Speaking at the IAFI Space Policy Conference 2026, Deb Kumar Chakrabarti, Member (Services), DoT, said India would need significant policy, regulatory and structural reforms to expand its presence in the global space sector.Also Read: India's private space startups gear up for commercial push after Skyroot's historic Vikram-1 successIndia's space economy is currently valued at $8.4 billion, with the government targeting an expansion to $44 billion by 2033, a move that would lift the country from the sixth-largest to the third-largest space economy globally."...becoming the number three country in the space economy in the world... requires many structural changes and adjustments in different policies and regulations," Chakrabarti said."...and the rank of the country will rise from number six to number three. I think it's a huge jump that we have planned in future," he added.The official said India has already built a reputation for cost-efficient and reliable space technology, with private companies such as Skyroot Aerospace and Agnikul helping lower launch costs. However, he stressed that the country now needs to move beyond small-payload launches.Citing SpaceX's Falcon rockets as an example, Chakrabarti said higher payload capacities significantly reduce launch costs per kilogram."One of the sectors where India must concentrate and look into is the high payload sector and the per kg cost of launch to be reduced. The number two point is the material dependencies," he said.He also highlighted India's continued dependence on imports for key space-grade materials and components, warning that reliance on overseas suppliers exposes the sector to supply-chain risks.Also Read: Private space invaders: Skyroot's perfect debut validates India Inc’s space push - repeat launches will prove the model"For example, the space-grade carbon fibre...We do not make the semiconductors and the cosmic radiation-proof semiconductors. We do not make the critical minerals which are dependent on lithium, cobalt, and titanium...mostly we depend on China. As you depend on another country, there is a risk in the supply chain," he said.According to Chakrabarti, reducing dependence on imported carbon fibre, radiation-hardened semiconductors and critical minerals such as lithium, cobalt and titanium will be crucial for building a resilient domestic space ecosystem.Focus on downstream economyThe DoT official also called for greater attention to the downstream space economy, noting that satellite applications generate the bulk of global space revenues.He said nearly 70% of global space revenues come from downstream services such as satellite data, geospatial analytics and Earth observation, while upstream activities such as launch vehicles and satellite manufacturing account for only about 30%."Upstream is important, but India's contribution, or what we are generating... the revenue is much below the 70 per cent segment. So, it is important that we now concentrate on the 70 per cent portion as well," he said.He added that innovation would play a key role in unlocking opportunities, particularly in satellite communications."Unless you actually come into the D2D mode, I don't think you are going to derive the best of the satellite broadband facility. And going into the device-to-device, a direct satellite signal catching into a mobile phone and talking and utilising it, is going to take some time," he said.Regulatory reforms neededChakrabarti also called for comprehensive reforms to strengthen India's regulatory framework for the space sector.He said the Indian National Space Promotion and Authorisation Centre (IN-SPACe) should be empowered as a full-fledged regulator with enforcement powers, including the authority to penalise unauthorised satellite operations."If there is a non-licensed operation of the satellite services, as of today, there is no penalty for that. I think it's time to make that regulator a full-fledged regulator. Give them all the powers to put a penalty for...non-licensed operation and allow them to decide on the IPR and make the sector much more friendly for the users," he said.He also advocated reforms in intellectual property rights, third-party liability provisions, faster multi-ministry approvals, improved orbital resource coordination and stronger space debris management to make India's space ecosystem more investment-friendly.The remarks come weeks after Skyroot Aerospace's Vikram-1 became the first privately developed Indian rocket to successfully reach orbit, marking a milestone for the country's commercial space industry.