Indian Council of World Affairs

Abstract: The evolution of the EU’s space policy marks Europe’s transition from a predominantly science-oriented space framework to a policy centred on competitiveness, strategic autonomy, and security. Driven by geopolitical events like the Russia–Ukraine war, uncertainty of transatlantic relations, and China’s growing space capabilities, the policy aims to create a more integrated and strategically driven European space ecosystem. If effectively implemented, it could open up new avenues for India–EU cooperation in commercial space, cyber-security, technology, and defence. 

Introduction

The EU Space Act, launched on 25 June 2025, represents a significant structural reform in European space policy. Designed to harmonise the EU’s largely fragmented space regulations, the Act strives to establish a single framework applicable to all member states.[i] In doing so, it seeks to address longstanding barriers of market participation, reduce regulatory uncertainty, and create conditions more conducive to investment and innovation. By simplifying compliance requirements and providing greater legal certainty, the Act seeks to reduce regulatory burdens, protect space assets, and establish a fair, predictable playing field for businesses across the European Union.[ii]

Beyond its economic considerations, the Act reflects a broader transformation in European strategic thinking. Space is increasingly viewed as a critical domain for economic resilience, technological sovereignty, secure communications, and defence. Accordingly, the Act forms part of a wider ecosystem of initiatives aimed at strengthening Europe’s strategic capabilities. These include diversification of the EU space market, the development of the IRIS² (Infrastructure for Resilience, Interconnectivity, and Security by Satellite) constellation, and emerging proposals such as the EU Space Shield Action Plan. Together, these measures seek to reduce dependence on external providers, protect critical infrastructure, and enhance Europe’s ability to operate independently in an increasingly contested space environment.

Drivers of Change

Although regulatory fragmentation within the EU has long been recognised as a challenge, recent geopolitical developments have fundamentally altered Europe’s perception of space, prompting a comprehensive reassessment of its strategy.

A major catalyst for this strategic shift was the Russo–Ukrainian War of 2022. The conflict underscored the growing importance of space-based assets in modern warfare, including intelligence gathering, secure communications, navigation, and battlefield coordination.[iii] It was during this time that Europe also noticed the growing threats presented by artificial intelligence and cyber technology. In response, the EU intensified efforts to strengthen its defence posture, resulting in the adoption of the Strategic Compass.[iv] Significantly, the Strategic Compass identified space as a strategic domain whose assets and services are essential to Europe’s security, resilience, and military effectiveness.[v] Recognising these vulnerabilities, the EU adopted a more security-oriented approach to space, resulting in the EU’s Space Strategy for Security and Defence in 2023, which prioritised protection of critical space infrastructure, enhancing resilience against hostile actions, and reducing strategic dependencies.[vi]

Together, these initiatives marked a fundamental shift in European thinking. Space was no longer viewed merely as a scientific and commercial endeavour but increasingly as a strategic asset underpinning defence planning, border management, maritime surveillance, and crisis response.

This strategic reassessment gathered further momentum during 2024, as developments in the international space arena reinforced the urgency of reforms. The United States continued to dominate the commercial space sector through private actors such as SpaceX,[vii] while China accelerated its ambitions through sustained state-backed investments and major scientific achievements, including the Chang’e-6 mission.[viii] At the same time, Europe’s declining share in the global space market[ix] and concerns regarding its innovation capacity raised questions about its long-term competitiveness.

Against this backdrop, the EU concluded that incremental reforms would no longer suffice. Acknowledging these structural challenges, the 2024 Draghi report, published in September 2024, led the EU to consider significant changes to build market-competitive capabilities and reduce external dependencies.[x] The report spoke of integrating the single market structure further and added space as a critical component. This paved the way for the formulation of a singular space regulations framework, resulting in the initiation of the EU Space Act of 2025.

Developments during 2025 and 2026 further reinforced the strategic rationale behind these reforms. The changing US strategic posture, including the tariff measures and growing uncertainty regarding transatlantic security commitments, highlighted Europe’s need for greater strategic autonomy.[xi] These developments further strengthened the case for initiatives such as the IRIS² mission[xii] and the EU Space Shield Action Plan,[xiii] while cybersecurity assumed even greater strategic importance amid the intensifying technological competition.

In parallel, China’s rapid advancement in space capabilities and the US’s continued dominance of the commercial space industry encouraged the European Union to strengthen its engagement with partners in the Indo-Pacific region. Consequently, the 2026 EU space policy placed greater emphasis on cooperation with the region to enhance its supply chain resilience.

India–EU Collaboration

The evolution of EU space policy creates important opportunities for expanding India–EU cooperation across both traditional and emerging domains. As two major players in the global space sector, India and the EU already collaborate in areas such as launch services, earth observation, satellite applications, and scientific research. The growing convergence of their interests, including concerns over market competition, technological resilience, cybersecurity, and China’s increasing global influence, provides a strong foundation for deepening their partnership.

One immediate implication of the EU’s strategic shift is the scope for enhanced cooperation in security and defence-related space activities. Both India and Europe share common priorities, including strategic autonomy, resilience, secure infrastructure, and indigenous technological capabilities in the field of space. Existing mechanisms such as the India/EU Space Dialogue together with the India–EU Security and Defence Partnership for 2026 and the Action Plan 2030 provide an institutional framework for expanding cooperation with space as one of the primary pillars of the partnership.

The implications extend well beyond security cooperation. The EU’s efforts to create a more integrated and competitive space market could encourage private sector engagement, investment flows, industrial partnerships and technological collaboration between India and Europe. Harmonised EU regulations may reduce trade and investment barriers, making the EU space sector more attractive to Indian firms. Conversely, India’s expanding commercial space ecosystem offers the EU opportunities to diversify its partnerships and reduce excessive trade dependence on traditional markets. The signing of the EU-India FTA[xiv] in January 2026, followed by the Indo-Slovakia and Cyprus-India trade agreements in June 2026, proves this factor.

Despite these opportunities, the prospects for deepening the EU–India collaboration ultimately hinge upon the successful implementation of the EU Space Act. While a brilliantly conscious endeavour, the act remains under deliberation and has yet to be passed. Further, initiatives such as the Space Shield Plan are still in their preliminary stages. Moreover, the EU’s internal political dynamics and differing threat perceptions may delay implementation. Until these reforms are fully realised, EU–India cooperation may continue to face some of the structural constraints associated with the EU’s past space policy frameworks.

Conclusion

The evolution of the EU space policy reflects the profound transformation of Europe’s strategic environment driven by changing geopolitics, security challenges, and a competitive global atmosphere. Beginning with the Strategic Compass and the EU Space Strategy for Security and Defence, Europe has progressively moved from viewing space primarily as a scientific endeavour to recognising it as a strategic domain central to economic resilience, security, and autonomy.

For India, this transformation opens up new avenues for cooperation that go beyond scientific collaboration. Shared priorities in terms of strategic autonomy, resilient infrastructure, cybersecurity, and advanced technologies provide a strong basis for expanding bilateral engagements. If successfully implemented, the EU Space Act could facilitate deeper cooperation in defence, commercial space activities, and digital technologies, thereby elevating the partnership to a more strategic level.

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*Diya Shankar, Research Intern, Indian Council of World Affairs, New Delhi
Disclaimer: Views expressed are personal. 

Endnotes

[i] European Commission. Directorate-General for Defence Industry and Space. “EU Space Act.” June 25, 2025. Accessed June 28, 2026. https://defence-industry-space.ec.europa.eu/eu-space-act_en.

[ii] European Commission. Directorate-General for Communication. “EU Space Act: Enhancing Market Access and Space Safety.” June 25, 2025. Accessed June 28, 2026. https://commission.europa.eu/news-and-media/news/eu-space-act-enhancing-market-access-and-space-safety-2025-06-25_en.

[iii] Bingen, Kari A. “Extending the Battlespace to Space.” Center for Strategic and International Studies. September 16, 2025. Accessed June 28, 2026. https://www.csis.org/analysis/chapter-8-extending-battlespace-space.

[iv] Council of the European Union, A Strategic Compass for Security and Defence — For a European Union That Protects Its Citizens, Values and Interests and Contributes to International Peace and Security, March 21, 2022, accessed June 28, 2026, https://www.consilium.europa.eu/en/press/press-releases/2022/03/21/a-strategic-compass-for-a-stronger-eu-security-and-defence-in-the-next-decade/.

[v] Clapp, Sebastian, and Clément Evroux. “EU Space Strategy for Security and Defence.” Briefing PE 754.598. European Parliamentary Research Service (EPRS), European Parliament. November 2023. Accessed June 28, 2026. https://www.europarl.europa.eu/RegData/etudes/BRIE/2023/754598/EPRS_BRI(2023)754598_EN.pdf.

[vi] Gonçalves dos Reis, João Carlos. “European Union Defense and Security Strategy for Space and Ground-Based Systems against Hybrid Threats.” Acta Astronautica 225 (2024): 55–66. https://doi.org/10.1016/j.actaastro.2024.09.003.You said: give key points

[vii] Andrea Dugo and Dyuti Pandya, “Europe at a Critical Juncture in the Evolution of the Global Space Economy,” ECIPE Occasional Paper No. 04/2026, European Centre for International Political Economy, April 2026, accessed June 28, 2026, https://ecipe.org/wp-content/uploads/2026/04/ECI_OccasionalPaper_04-2026_LY02.pdf.

[viii] Jones Andrew, "Chang'e 6 Is Just the Tip of China's Space Ambitions," BBC Future, May 10, 2024, accessed June 28, 2026, https://www.bbc.com/future/article/20240510-change-6-is-just-the-tip-of-chinas-space-ambitions.

[ix] European Space Agency. (2026, January 27). European Space Conference in Bruxelles: ESA DG keynote address [Video]. YouTube. https://www.esa.int/ESA_Multimedia/Videos/2026/01/European_Space_Conference_in_Bruxelles_ESA_DG_keynote_address

[x] International Capital Market Association (ICMA). “Draghi Report: Summary of Recommendations on CMU and Financial Services.” September 10, 2024. Accessed June 28, 2026. https://www.icmagroup.org/assets/Draghi-report_Sept-9.pdf.

[xi] Apps Peter. “The US Is Not Making It Simple for European Defence to Stand on Its Own Feet.” Reuters. June 26, 2026. Accessed June 28, 2026. https://www.reuters.com/commentary/us-is-not-making-it-simple-european-defence-stand-its-own-feet-2026-06-26/.

[xii] European Commission. Directorate-General for Defence Industry and Space. "IRIS² — Secure Connectivity." Accessed June 28, 2026. https://defence-industry-space.ec.europa.eu/eu-space/iris2-secure-connectivity_en.

[xiii] Clapp, S. (February 20, 2026). European Space Shield – action plan. European Parliament Legislative Train Schedule. https://www.europarl.europa.eu/legislative-train/theme-a-new-era-for-european-defence-and-security/file-european-space-shield-–-action-plan

[xiv] Press Information Bureau, Ministry of Commerce and Industry. “India–EU Free Trade Agreement Concluded: A Strategic Breakthrough in India's Global Trade Engagement.” Government of India. January 27, 2026. Accessed June 28, 2026. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219065®=3&lang=2.