On August 23, Prime Minister Narendra Modi celebrated India’s third National Space Day, observed to mark the landing of Chandrayaan-3 near the lunar south pole, during an interaction in New Delhi with the CEOs and founders of 20 Indian space startups. Calling for a private-sector environment to magnetise global talent, investments and companies, he challenged private companies to create thousands of startups within the next five years and increase launch capacity from less than 10 a year at present to 50 rockets from 2029 onwards.
The 2026 celebrations were held under the theme ‘Towards Viksit Bharat: Innovating, Collaborating and Aspiring to Global Space Leadership’. What seems grandiose is not the ambition—the Modi government has never lacked in esprit—but that the PM said it not at the beating heart of India’s space programme, the Indian Space Research Organisation headquartered at Bengaluru, but in front of major private-sector honchos and startup founders in the country’s capital, where policy decisions are made.
What remained unuttered was the Indian government’s latest decision to relegate Isro to a role highlighted in its name: research and research alone. As I had hazarded might happen in my previous column, Isro has been divested of all rocket production and launches, which have been handed over to the private sector. It has begun transferring the production rights and technology of rockets—beginning with the SSLV (small satellite launch vehicle) to Hindustan Aeronautics, and the PSLV (polar satellite launch vehicle) and LVM3 (launch vehicle mark-3)—the erstwhile geosynchronous satellite launch vehicle mark III, India’s most powerful operational heavy-lift vehicle—to private domestic industry. Equally to the point, unlike with the SSLV process, public sector units will not be allowed—please note the finality—to participate in the transfer process, leaving the private sector entirely in charge.
The ‘private domestic industry’ bit appears to be for public consumption. For the government announced that it has “liberalised” the “foreign direct investment policy for the space sector” in order “to make it more investor-friendly”. How friendly is the pointer to the level of domestication: the government has updated its FDI guidelines to allow up to 49 percent through the automatic route in launch vehicles and spaceports, 74 percent in satellite manufacturing, and 100 percent in component manufacturing.
This is huge—its only comparison being with the US, where 90 percent of all space launches as of 2025, and 84 percent of all space patents in 2023 were by the private sector. What will not be replicable in India is that small companies, universities and nonprofits accounted for 40 percent of all space patents in 2023.
That patent space will be occupied in India not by the non-government sector but by Isro, which has filed 200-400 registered/active domestic and global space patents, with total historical filings exceeding 370-580 patents globally. And these patents—which originate in the Vikram Sarabhai Space Centre in Thiruvananthapuram, the U R Rao Satellite Centre in Bengaluru and the Space Applications Centre in Ahmedabad—will be sold to the private sector for a song, according to plans that the government has acknowledged in Parliament.
But in no country in the world are launches the exclusive domain of the private sector, with government space organisations playing a ring-fenced research or supportive role.
About 80 percent of physical hardware, subsystems and components for major Isro launch vehicles are already being built—or assembled, using subcontracted componentry—by more than 500 domestic private companies and tier-1 manufacturers, that is, large and smaller private enterprises. But as of June 2026, the government’s new privatisation policy via the single-window Indian National Space Promotion and Authorisation Centre or IN-SPACe has registered more than 4,500 organisations, issued 133 authorisations and signed 106 memoranda of understanding. What will such a legion of private space organisations do but riot for contracts (or feed consortia that will actually grab the biggest slices of a limited pie)? Despite being the world’s eighth-largest space economy, India’s private space industry is only 2 percent of that of the world.
One argument in favour of the massive privatisation of spacefaring could be cost reduction. According to a recent peer-reviewed study published in Economics Letters, titled ‘Geopolitics and Space Access: Cost Asymmetries and Strategic Dependence’ by two economists from Cambridge and Italy, India is the most expensive launchpad in the world. In 2025, the average cost of hoisting a kilogram of payload into orbit was $13,302 for India, $3,225 for the US (SpaceX), $9,897 for Europe, $6,682 for Russia, $5,809 for China, and $5,287 for Japan. The global average was $3,868. That is, India’s cost is four times that of the cheapest and almost three-and-a-half times the global average.
It is an ambition-killer of a difference, which India should definitely try to minimise. The problem: unlike the other five countries, India has no homegrown private-sector space giant. India is at least two decades behind the others. In 2005, of the 18 commercial space launches, Russia flew eight, Europe five, and the US one. China’s first commercial launch was in 2018.
There must be some logic to India’s sudden leap into the deep end of space privatisation, but I’m hard put to find it.
Kajal Basu | Veteran journalist
(Views are personal)
(kajalrbasu@gmail.com)
