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The objective, ultimately, is not to privatise ISRO. It is to make India’s space programme too large for ISRO to have to do everything itself
The government’s push has triggered an uncomfortable question inside ISRO—Is giving private companies a bigger role the first step towards privatising the country’s premier space agency? (AI-Generated Image)
For decades, India’s space programme has been synonymous with one institution: ISRO. From putting satellites into orbit to launching Chandrayaan missions and developing India’s own rockets, the space agency has built almost every critical capability largely within the government system, with private industry playing a supporting role.
That model is now changing.
India wants to dramatically expand its space economy, increase the frequency of rocket launches and create a larger ecosystem of private companies that can build rockets, satellites and space systems. The government’s push has, however, triggered an uncomfortable question inside the Indian Space Research Organisation (ISRO)—Is giving private companies a bigger role the first step towards privatising the country’s premier space agency?
ISRO Chairman V Narayanan has sought to draw a clear distinction. ISRO, he says, is not being privatised. Instead, the agency wants industry to take on a much larger share of manufacturing and other mature, repeatable activities, allowing ISRO to concentrate on advanced research, strategic missions and technologies that India has yet to master.
The argument behind the shift is simple: India’s space ambitions have grown far beyond what ISRO alone can deliver. The country is targeting around 50 rocket launches a year, wants to build a larger commercial space industry and hopes to capture a bigger share of a global space economy worth hundreds of billions of dollars.
So, why does India want private companies to build rockets that ISRO pioneered? How much money is flowing into the sector? What happens to national security when private companies enter a traditionally strategic domain? And does greater private participation actually weaken ISRO or could it allow the space agency to focus on bigger ambitions, much as NASA and other major space agencies have done?
A Story Of Changing Ambitions
Over several years, ISRO developed the technology, built rockets and satellites, conducted testing, launched them and then moved on to the next generation, displaying an enormously successful model.
Chandrayaan-3, for instance, cost Rs 615 crore, including the launch vehicle. India’s Mars Orbiter Mission, Mangalyaan, cost about $74 million, an extraordinarily low figure by global standards.
But India’s ambitions have changed. The country now wants more frequent satellite launches, a larger commercial launch business, human spaceflight, the Bharatiya Antariksh Station, lunar exploration, deeper planetary missions, a larger share of the global space economy, private satellite constellations and Earth-observation services.
One organisation cannot efficiently do all of this simultaneously.
That is why the policy changed in 2020, opening the sector to private participation and creating IN-SPACe as the regulator and facilitator between government and non-government space companies.
By 2026, India had around 440 space-tech start-ups, according to government data. IN-SPACe had granted 113 authorisations to 52 non-government entities, including 18 start-ups.
The investment numbers are equally revealing. Private investment in India’s space sector rose from $100.5 million in 2021-22 to $618.5 million by March 2026, almost a six-fold increase. Of this, $187 million was invested during 2026 alone, according to government data.
Separate industry data compiled by Tracxn put cumulative external venture-capital funding for Indian spacetech companies at $871 million across 285 companies and 241 funding rounds by July 2026.
And the companies are no longer merely developing components.
Skyroot has become India’s first space-tech unicorn, with a valuation of about $1.1 billion after raising $60 million in its latest round. Its total capital raised has reached about $160 million. Pixxel has just raised another $100 million, taking its total funding to $195 million.
The result is a fundamentally different ecosystem: companies working on rockets, propulsion, satellites, hyperspectral imaging, space situational awareness, debris tracking and space-based data.
Why Does ISRO Need Industry To Build Its Rockets?
There are several reasons.
1. Scale: ISRO was built to develop technology and execute missions, not to become a mass-production company.
Once a rocket design has matured, repeatedly manufacturing the same vehicle is not necessarily the best use of ISRO’s scientists and engineers. Industry can take over repetitive production while ISRO works on what comes next.
This is already happening.
A consortium involving Hindustan Aeronautics Ltd (HAL) and Larsen & Toubro (L&T) is producing PSLVs, while SSLV technology has been transferred to HAL. NSIL has initiated the construction of five PSLV-XL rockets through the HAL-L&T consortium.
2. More Rockets Mean More Launches: India currently does not launch anywhere near 50 rockets a year.
The target of 50 launches annually is therefore not simply about increasing ISRO’s workload. It is a signal that India wants a much larger launch industry.
IN-SPACe Chairman Pawan Goenka has said India needs to reach around 50 launches a year to unlock a $44-billion space economy. The figure underlines the scale of the ambition: India is trying to move from a space programme centred primarily around government missions to a broader ecosystem involving launch services, satellite manufacturing, space-based applications and private investment.
A government agency building every rocket itself would become a bottleneck. Private manufacturers can create parallel production capacity.
3. Freeing ISRO’s Scientific Manpower: Narayanan’s argument is particularly important here.
If an engineer is spending time manufacturing a mature PSLV component, that engineer is not working on a reusable launch vehicle, a new propulsion system, a lunar mission or India’s space station.
The logic is to let industry manufacture what India already knows how to build. Let ISRO work on what India does not yet know how to build.
4. Lowering Costs Through Competition: Competition can also change the economics of launches.
A government agency generally works through allocated budgets and institutional programmes. Multiple private launch providers, by contrast, can compete on launch price, turnaround time, reliability, payload capacity, launch frequency, and specialised missions.
That could make India more attractive to foreign satellite operators. The government’s data already shows the direction: foreign satellite launches using Indian capabilities increased from 35 before 2014 to 399 by January 2026.
The Money Game
The scale of public spending is significant, but still limited compared with major space powers.
The Department of Space has been allocated Rs 13,705.63 crore for 2026-27. Of this, Rs 10,397.06 crore is for space technology, Rs 1,725.06 crore is for space applications, Rs 569.76 crore is for space science, and Rs 396.32 crore is establishment expenditure.
The Parliamentary Standing Committee noted that the Department had actually sought Rs 15,604.80 crore for 2026-27, but the approved allocation was Rs 13,705.63 crore. It also noted that the 2025-26 allocation had been revised down from Rs 13,416.20 crore to Rs 12,448.60 crore.
That makes private capital particularly important.
The government cannot, and perhaps should not, finance every rocket, satellite constellation, launch facility and downstream application itself. The idea is to use public money to create technology, infrastructure and a regulatory framework that can crowd in much larger private investment.
The Challenge
The number 50 is perhaps the most revealing figure in the current debate.
India’s requirement, according to Narayanan, is about 50 launches annually. ISRO currently has only 56 satellites in orbit, illustrating the enormous gap between India’s present capability and the scale of activity being envisaged.
The need for so many launches is because the future space economy is not just about occasional Chandrayaan-type missions.
It involves thousands of satellites for broadband, navigation, weather forecasting, agriculture, disaster management, telecommunications, Earth observation, defence and surveillance, scientific research, and commercial data services. Satellite constellations also need replacement.
A country hoping to become a serious space economy therefore needs something closer to a space manufacturing and launch industry than a traditional space agency.
And this is where private companies become indispensable. If ISRO remains responsible for every rocket, satellite and launch, increasing the number of missions simply means increasing the burden on the same organisation.
If dozens of companies can manufacture rockets, components and satellites, India can increase capacity without proportionately increasing the size of ISRO.
What About The National Security Issue?
Space is no longer merely about scientific exploration and a failure or hostile disruption of space infrastructure can therefore have direct national-security consequences.
This is why concerns raised by ISRO employees cannot simply be dismissed. An opinion piece in The Mint argued that ISRO’s strategic role means it must remain publicly owned, particularly as space becomes increasingly important to national security and future military competition.
The sensible model is therefore not government or private sector, but government and private sector, with clearly defined boundaries.
Ideally, areas involving strategic national capabilities, high-risk R&D, deep-space missions, human spaceflight, advanced propulsion, next-generation launch technology, critical defence-related capabilities, strategic satellite systems, and national space infrastructure should remain with ISRO.
What can potentially move to industry can be mature rocket manufacturing, routine satellite manufacturing, commercial launches, satellite components, Earth-observation services, satellite data applications, ground infrastructure, space logistics, commercial communications, debris monitoring and other downstream services.
The government has also been working on dedicated safety and security guidelines for private participation. As of July 2026, 105 authorisations had been granted to private entities, according to the Department of Space.
So, the challenge is not simply allowing private companies in. It is building security architecture around their participation.
The NASA Example
The United States offers perhaps the strongest argument that a government space agency and private space companies can actually make each other stronger.
NASA’s Commercial Crew programme works on a simple principle: NASA buys a service rather than having to own and operate every piece of infrastructure itself.
Companies such as SpaceX and Boeing developed and operate crew transportation systems, while NASA establishes requirements, oversees safety and purchases transportation services. NASA explicitly says that this frees the agency to focus on deep-space exploration.
The important point is that NASA did not disappear when SpaceX became powerful. Instead, NASA could devote more attention to programmes such as Artemis, the Moon and eventual Mars exploration, while commercial companies built up capabilities in low-Earth orbit.
NASA’s Commercial Crew programme itself began with relatively modest government investment: the agency invested about $50 million in its first Commercial Crew Development round in 2010 to stimulate private development.
The lesson for India is not that ISRO should become NASA. It is that the government does not have to own every capability in order to control the strategic direction of the space programme.
Japan Offers Another Model
Japan provides another useful example because its space ecosystem has evolved around a strong government agency alongside private industry.
JAXA lists private companies working across satellite manufacturing, launch services, communications, Earth observation, satellite data, ground systems, space robotics, on-orbit servicing, and lunar exploration. Companies such as Mitsubishi Electric, NEC, IHI Aerospace, Axelspace and ispace operate alongside JAXA rather than replacing it.
JAXA has even deliberately opened parts of its own infrastructure to commercial operators. For example, private companies Space BD and Mitsui & Co. were selected to provide small-satellite deployment services from the Japanese Kibo module. JAXA says this transferred 70 per cent of available deployment capability to those companies.
JAXA also has a formal category of JAXA Startups and Partner Startups, allowing businesses to commercialise technologies and intellectual property emerging from JAXA activities.
The Bigger Question: Who Builds The Next ISRO?
The bigger question now is how far the government wants to take this transition.
India has already created IN-SPACe as a regulator/facilitator, NSIL as the commercial arm, technology-transfer mechanisms, private launch infrastructure, government-backed funding programmes, competitive manufacturing models, private launch companies, private satellite manufacturers, and commercial Earth-observation companies.
There is even a Rs 1,000-crore Space Sector Venture Capital Fund, while government schemes also include a Rs 500-crore Technology Adoption Fund and support for satellite buses and common technical facilities.
The private sector is responding.
Skyroot has raised $160 million and crossed a $1.1-billion valuation. Pixxel has raised $195 million, including its latest $100-million round. And the broader ecosystem has attracted hundreds of millions of dollars in private capital.
India clearly does not need to choose between ISRO and private space companies. It needs both.
ISRO can build the technologies India has never built before. Industry can manufacture at the scale India will increasingly need. That is how India gets from a handful of spectacular missions such as Chandrayaan to an actual space economy capable of dozens of launches, hundreds of satellites and globally competitive private companies every year.
The objective, ultimately, is not to privatise ISRO. It is to make India’s space programme too large for ISRO to have to do everything itself.
Quick Answers
India is opening its space sector to private companies to dramatically expand its space economy, increase rocket launch frequency, and create a larger ecosystem for building rockets, satellites, and space systems. This shift allows ISRO to focus on advanced research and strategic missions, while industry handles manufacturing and repeatable activities, aiming for 50 launches annually and a $44 billion space economy by 2033.
About the Author
Apoorva Misra is an Associate Editor at News18.com with a keen interest in politics and current affairs. She loves uncovering fresh angles and telling stories through long-form features and explainers…Read More
September 08, 2026, 14:28 IST
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