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As megaconstellations crowd low-Earth orbit, India’s Bharatiya Antariksh Station may enter a future where debris, risk, and uninsurability define access to space.
Three Chinese taikonauts, members of the Shenzhou-20 crew, supposed to return from the Tiangong Space Station to China on 5 November 2025, are now supposed to be indefinitely stranded in Low-Earth Orbit (LEO). The crew return capsule, as informed by the China Manned Space Agency, has supposedly been impacted by a small space debris, and this impacted capsule would return to Earth without the taikonauts. This is not the first time the Tiangong has been snagged in this manner. In 2023, the Chinese space station’s solar panels were struck by debris, leading to a partial power outage. The International Space Station (ISS), which also operates in LEO, has become increasingly vulnerable. In the past decade, the International Space Station (ISS) was manoeuvred on many occasions to avoid getting hit by space debris, and in some instances, getting hit by it. The LEO will get more swamped with satellites in the coming years, and the Bharatiya Antariksh Station - India’s space station - would have to operate in an even more dangerous LEO, as none of the space-capable governments are eager to tame their uninhibited appetite for raising satellite megaconstellations.
The space economy has occupied a coveted spot among management consulting firms, and the overwhelming influence they have over governments all across the world ensures that ‘satellite megaconstellations’ remain at the crux of the multi-trillion-dollar global space economy.
The rise of private space companies around the world in the past few years is marked by a market phenomenon starkly different from the earlier era of space-agency-led space programmes. This market phenomenon is the overall emphasis on satellite constellations. Constellations benefit the space economy - it benefits the space launch industry, the in-orbit operations industry, the space data processing companies and the end-users. The space economy has occupied a coveted spot among management consulting firms, and the overwhelming influence they have over governments all across the world ensures that ‘satellite megaconstellations’ remain at the crux of the multi-trillion-dollar global space economy. This, in turn, has stimulated venture capital and private equity to take a keen interest in commercial space companies that are ready to deliver to their investors and end-users. None of these beneficiaries would review the use of constellations, as it is the core of the business and the financial windfalls they would generate. Insincere talks on sustainability have entered into the space domain; however, it remains part of inconclusive showmanship on policy fora and in boardrooms that are more invested in superficial solutions, such as wooden satellites, space situational awareness, and clean propulsion than in addressing the crux. The crux is that the LEO satellites and other LEO assets are increasingly becoming uninsurable.
Global space insurance comprises a very small, specialised market of firms and underwriters, primarily based in the United States (US) and Europe. The services they provide cover the different aspects of insurance. Space insurance firms address the lifecycle of a space-based system, preventing them from the extreme risks of launch failure, in-orbit malfunction, and third-party damage. Pre-launch insurance addresses the construction, testing and transportation of a space system; launch insurance protects the most vital part of the task; from ignition of the system to its separation in orbit; the operational lifespan of the system is covered by operational insurance; finally, third-party insurance protects these systems against claims for damages or injuries to other parties caused by space activities, including launch failures, satellite malfunctions, or re-entering debris. These insurance products are vital to the global space economy. Without them, companies struggle to secure financing, launch slots, and international partners.
Growing constellations, the defunct satellites emanating from them, and the orbital debris introduce significant challenges into these calculations.
The business of space insurers - such as AXA XL, Global Aerospace, Munich Re, International Space Brokers, Marsh, Lloyd’s and Beazley - runs on modellable and predictable risks. Growing constellations, the defunct satellites emanating from them, and the orbital debris introduce significant challenges into these calculations. In response, space insurers are raising premiums, imposing exclusions for debris-related damage or untracked objects; limiting coverage to satellites with robust deorbit and collision avoidance plans; and, in some cases, withdrawing entirely from underwriting missions in high-risk orbital zones. If orbital congestion continues to rise, the LEO is moving towards becoming an uninsurable and high-risk orbital zone.
While financially well-endowed space companies can absorb the risks of loss within themselves, smaller firms face a difficult decision: take catastrophic risk or cease operation. As uninsurability rises, many smaller space companies may be unable to secure funding, launch contracts, or international partnerships. Additionally, space ecosystems supported by countries with incessantly printed currencies artificially write off losses. Such write-offs are not possible for smaller space companies and countries with efficient and clean economies.
Reduced insurance participation leads to increased orbital risks, which in turn makes insurance even more expensive and less accessible.
The global space economy is highly inequitable, wherein only geopolitical behemoths or highly capitalised actors can remain connected and operate in congested orbits. Reduced insurance participation leads to increased orbital risks, which in turn makes insurance even more expensive and less accessible. To avoid this financial insecurity, these smaller companies will get bought out by capitalised actors. If they chose to remain solo, there would be a convergence of physical and economic risks in orbit, creating a dangerous feedback loop: increasing debris drives up insurance costs, which reduces coverage participation, leading to more unaccountable actors in space, which further increases debris and collision risks.
Well before India prepares to launch its space station, it should prepare not only to make it agile to ward off growing debris in its orbit, but also to ward off the financial uninsurability instigated by the thousands of additional satellites and their fragments looming dangerously in its vicinity. With increased democratisation of space access, the great game in LEO is to restrain access through space economic coercion, by increasing risk - physical, through Kessler Syndrome and economic, by making LEO uninsurable.
Chaitanya Giri is a Fellow at the Centre for Security, Strategy, and Technology, Observer Research Foundation.
Tara Chawla is an Intern at the Observer Research Foundation.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Dr. Chaitanya Giri is a Fellow at ORF’s Centre for Security, Strategy and Technology. His work focuses on India’s space ecosystem and its interlinkages with ...
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