Private sector in Indian space tech: Progress, challenges, and future

Sunita Williams' return in a SpaceX capsule has put the focus back on the role of private sector in space journeys

After 286 days of uncertainty and orbiting Earth 4,576 times, astronauts Sunita Williams and Butch Wilmore have finally splashed down off the coast of Florida. The crew landed in a SpaceX capsule, after travelling to the International Space Station aboard Boeing’s new Starliner, underscoring the growing dominance of the private sector in the space industry.

 

In India too, the need for a faster evolution of the private sector in space is being felt especially in the upstream sector, against the backdrop of the the ‘Bharatiya Antriksh Station’ planned by 2035, and dreams of an Indian landing on the Moon by 2040. There’s a closer target as well with India’s crewed orbital spacecraft readying to take off in 2026.

 

The upstream segment refers to all activities, products, and infrastructure ensuring the development, testing, launching, operations, and monitoring (including space situational awareness) of space assets. And, the downstream segment is about all applications, services, and devices relying on satellites to create business value. At present, some 250 odd startups are at the forefront of the private sector space initiative in India across upstream and downstream segments.

 

“Upstream contributions are beginning to happen, whereas application sector companies are reasonably well established. When you link the human space life mission to the private sector in India, we must have a profitable and economically viable space sector attractive for private players. Only then, the real significant growth in private sector will be possible,” said S Somanath, former chairman of the Indian Space Research Organisation (ISRO), and Vikram Sarabhai professor at ISRO. 

 

New initiatives

 

To initiate this, the government has put in place the New Space Policy 2023, FDI Policy 2024, the Indian Telecommunication Act 2023, and geo-spacial data policy. All these measures are expected to push the Indian space sector from $9 billion to an estimated $44 billion in the next few years. “Now, the biggest hurdle is demand creation. Unless demand is visible, bigger players will not invest…..  Startup players at the bottom end are primarily looking into innovation and new initiatives, while the top end or the upstream segment requires huge investments. It includes a long gestation period, and high risk, which is definitely not a thing for the startups,” Somanath explained.  

 

Last year, the government took some important steps. It allowed 100 per cent foreign direct investment in space under the automatic route for satellite components and systems, up to 74 per cent for satellite manufacturing and operation, and 49 per cent for launch vehicles and spaceports. In addition, the ₹1,000-crore venture capital fund has encouraged private players, including startups and global investors, so that they can look at space more seriously in the Indian context.

 

“We are at a nascent stage in upstream. We need a long way to go to achieve what SpaceX has done. We had only two launches by Skyrooot and Agnikul so far,’’ said A K Bhatt, director general of the Indian Space Association (ISPA). The upstream market is also limited, he said. According to Bhatt, the Indian Space Research Organisation (Isro) should maximise the involvement of the private sector to develop their capabilities. 

 

Of the global space economy, valued at around $470 billion, around 80–90 per cent is coming from the downstream sector. In India too, of the $8.4 billion space economy, around 80 per cent comes from downstream services.

 

Startup universe

 

In the upstream sector, the major private startups in India include Skyroot Aerospace, Agnikul Cosmos, and Pixxel, focusing on rocket development, satellite launches, and space technology. In 2022, Skyroot conducted the test launch of Vikram-S, becoming the first private company from India to launch a rocket. By the middle of this year, its maiden mission Vikram-1 with around 480 kg payload will be launched to a 500 km low inclination orbit. In May 2024, Chennai-based space startup Agnikul launched its Agnibaan rocket, marking the second privately built rocket launch in India and the first from a private launchpad--Dhanush.

 

As India aims to achieve a $44 billion share in the global space market by 2032, startups will play a crucial role by driving new and faster innovations to meet commercial demands, Skyroot Aerospace founder Pawan Kumar Chandana said. Indian startups are now at a tipping point, transitioning from demonstration missions to commercial missions, according to Chandana. ‘’And the logical next step would be to participate in both government and commercial human space missions,’’ he said.

 

Among other important players in the upstream sector are Manastu Space (specialising in green propulsion technology for satellites and spacecraft), Digantara (pioneering Space Situational Awareness (SSA) company with real-time tracking of space debris), OrbitAID (developed the Standard Interface for Docking and Refueling), InspeCity (explores the use of laser-equipped satellites for space debris removal) and Forge Innovation & Ventures (known for autonomous docking and proximity operations).

 

PPP route and more

 

In the human space flight, private players are being encouraged to come in, Somanath pointed out. Highlighting the goals of the ‘Bharatiya Antriksh Station’ programme, he said besides the private sector giving manufacturing support, its role in exploring the microgravity environment for research will be significant. ‘’The second way is to bring global and international collaborations,” Somanath added.

 

Meanwhile, public private partnerships also got a boost after NewSpace India Limited (NSIL) signed a contract with the HAL-L&T consortium to produce five Polar Satellite Launch Vehicles (PSLV-XL), and the first fully indigenously manufactured PSLV is likely to be launched during the second quarter this year.

 

A key milestone in this transition is the LVM3 PPP Model, where Isro is collaborating with private enterprises to scale production of its heavy-lift launch vehicle for commercial use. Similarly, IN-SPACe’s Build-Own-Operate model for Earth Observation Satellites (EOS) is set to revolutionise satellite data services, unlocking opportunities across agriculture, disaster management, urban planning, and defence, based on ISPA views.

 

With all these measures, the Indian private sector is perhaps on the road to play a critical role in India’s space story.