India’s New Space Race: From ISRO to a Space Economy

For decades, India’s space programme was almost synonymous with ISRO. That is changing rapidly.

Over the last few years, India has been quietly building something much bigger than a government space programme: a private space industry. Rockets are being designed by startups, satellites are being built by private companies, new launch infrastructure is coming up, and space-derived data is increasingly being turned into commercial products. What was once largely a government domain is gradually becoming an ecosystem involving startups, large engineering companies, investors, universities and global partners.

And some of the developments taking place right now are genuinely exciting.

The policy shift that started it

The transformation began with the government's decision in 2020 to open the Indian space sector to private participation. This was followed by the Indian Space Policy 2023, which explicitly sought greater private-sector participation across the entire space value chain—from building space and ground assets to launch services, satellite communications, remote sensing and space-based applications.

The creation of IN-SPACe (Indian National Space Promotion and Authorisation Centre) was particularly important. It was designed to act as an interface between the government and private players, providing authorisation, promoting private participation and facilitating access to ISRO infrastructure and expertise.

The policy framework has continued to evolve. In 2024, the government liberalised the Foreign Direct Investment rules for the space sector, allowing up to 100% foreign investment under specified routes and activities. It also introduced the 2024 Norms, Guidelines and Procedures for the Authorisation of Space Activities.

The government has subsequently added a ₹1,000 crore Venture Capital Fund for space startups and a ₹500 crore Technology Adoption Fund, while ISRO technologies are increasingly being transferred to industry. By August 2026, NSIL had signed 118 technology-transfer agreements covering 83 technologies developed by ISRO and the Department of Space.

These may sound like administrative changes, but they are important because space is an unusually capital-intensive industry. A startup cannot build a rocket or satellite ecosystem if it has no access to infrastructure, technology, funding or a predictable regulatory framework.

The policy therefore did something more fundamental: it changed the space sector from a government programme into an ecosystem.

And the private sector has responded

The numbers are striking.

India had just one registered space startup in 2014. By August 2026, the number had reached around 440. IN-SPACe had granted 113 authorisations to 52 non-government entities for various space activities.

Of course, not all 440 startups are building rockets. And that is precisely what makes the development interesting.

The new ecosystem covers launch vehicles, satellite manufacturing, propulsion, Earth observation, space situational awareness, communications, electronics, data analytics and downstream applications.

Companies such as Skyroot Aerospace, Agnikul Cosmos, Pixxel, Dhruva Space and Digantara have emerged as some of the more visible names in this new generation of Indian space companies.

And we are now moving beyond prototypes.

On 18 July 2026, Hyderabad-based Skyroot Aerospace successfully launched Vikram-1, India's first privately developed orbital rocket, placing customer payloads into low Earth orbit. The achievement was an important milestone because it demonstrated that an Indian private company could progress from developing rocket technology to actually reaching orbit.

Meanwhile, Chennai-based Agnikul Cosmos is developing the Agnibaan launch vehicle and has already demonstrated its technology through a sub-orbital mission. Its approach includes the use of 3D-printed rocket engines and a privately operated launch pad at Sriharikota.

The interesting part is that these companies are not simply trying to replicate ISRO.

They are experimenting with different technologies, business models and launch architectures, while ISRO continues to work on much larger and more complex missions.

That division of roles could become increasingly important.

ISRO is not disappearing. Its role is changing.

There has understandably been some debate about what increasing private participation means for ISRO.

But there is another way to look at it.

If private companies can increasingly manufacture launch vehicles, satellites and components, ISRO can devote more of its resources to missions that require long-term scientific and technological investment.

Gaganyaan, Chandrayaan-4, the Venus Orbiter Mission and the planned Bharatiya Antariksh Station are examples of the kind of ambitious programmes that remain firmly within India's national space programme. ISRO's current human-spaceflight roadmap also envisages moving from Gaganyaan towards a sustained human presence in low Earth orbit through the Bharatiya Antariksh Station.

In that sense, the future may not be ISRO versus private companies.

It could increasingly be ISRO + private industry.

ISRO develops technologies and undertakes difficult scientific missions. Private companies commercialise technologies, build infrastructure, manufacture at scale and develop new applications. Large engineering companies and MSMEs provide components and manufacturing capacity.

That is how an industry begins to form.

From rockets to an entire industrial ecosystem

Perhaps the most interesting part of the story is what sits underneath the headline about rockets.

A space industry requires much more than launch vehicles.

It needs propulsion systems, electronics, avionics, sensors, composites, precision machining, testing facilities, software, ground stations, satellite components and specialised materials.

Companies such as Larsen & Toubro and Hindustan Aeronautics are already participating in this broader ecosystem, while smaller companies are finding opportunities in specialised components and technologies. ISRO's transfer of SSLV technology to HAL is one example of how capabilities developed within the government system can migrate into industry.

There is also an emerging manufacturing opportunity.

If India can develop the ability to manufacture satellites, launch vehicles and components competitively, space could become another high-value manufacturing ecosystem alongside aerospace and defence.

And the opportunity doesn't stop at manufacturing.

The real economic value may eventually come from what happens after the satellite reaches orbit.

The bigger opportunity may be data, not rockets

This is where the space economy becomes relevant to everyday life.

A satellite collecting images of the Earth is not particularly useful to most people by itself. But combine those images with artificial intelligence, analytics and industry-specific applications, and the possibilities become much larger.

Consider agriculture.

Satellite imagery can help identify crop stress, estimate yields, monitor irrigation and assess agricultural risks.

Consider infrastructure.

Satellite data can be used for mapping, construction monitoring, urban planning, road and railway development and disaster management.

Consider mining and energy.

Remote sensing can help identify resources, monitor mines and pipelines, and track environmental changes.

Consider insurance and finance.

Better information about crops, weather and physical assets can improve risk assessment.

Consider communications.

Satellite networks can provide connectivity to areas where terrestrial infrastructure is difficult or uneconomic to deploy.

And then there are newer applications that sound almost futuristic today.

Indian startup TakeMe2Space, for example, is working on orbital computing—processing data in space rather than sending all raw data back to Earth. The company says its technology is being developed for applications including agriculture, mining, supply chains and insurance.

Similarly, Pixxel is developing hyperspectral imaging satellites capable of collecting information across many more spectral bands than conventional imagery. Such data can potentially help identify crop conditions, minerals, environmental changes and other characteristics that ordinary photographs cannot easily reveal. Its Firefly constellation is already being deployed.

And Digantara is working on space situational awareness—essentially monitoring and understanding what is happening around satellites in orbit. As the number of spacecraft increases, knowing where other satellites and debris are becomes increasingly important.

This is why I think the space economy should not be viewed simply as a rocket business.

It is increasingly becoming an information, infrastructure and services business.

How big could this become?

There are obviously many estimates, and they should be treated as projections rather than forecasts.

India's space economy was estimated at around $8.4 billion in 2023, representing roughly 2% of the global space economy. The government's Decadal Vision and Strategy envisages the Indian space economy reaching approximately $44 billion by 2033 and $100 billion by 2040.

A recent EY analysis similarly puts the 2033 opportunity at around ₹4.22 lakh crore ($44 billion). Importantly, EY argues that the larger opportunity will increasingly come from downstream services and applications rather than simply from manufacturing rockets and satellites.

That would represent roughly a five-fold increase over the current size of the industry within about a decade.

Whether India actually reaches those numbers will depend on how quickly commercial demand develops. But even the direction of travel is significant.

An industry that was worth roughly $8–9 billion is being discussed in terms of tens of billions of dollars within the next decade.

There is still a long way to go

It is easy to become carried away by successful launches and impressive startup valuations.

Space remains an exceptionally difficult business.

Building a rocket is expensive. Testing takes time. Failures are inevitable. Launch schedules can slip. Satellite manufacturing requires precision and reliability. And unlike many software businesses, there is no shortcut around physics.

There are also market risks.

A company can develop technically impressive technology and still struggle to find enough customers. Launch capacity could eventually exceed demand in some segments. Access to capital will matter enormously because many of these businesses will need years of investment before achieving meaningful commercial scale.

Regulation will also remain important.

Space is closely connected to national security, communications spectrum, defence and foreign policy. Export controls and technology restrictions can affect access to critical components. International trade tensions and sanctions can disrupt supply chains. And because satellites operate across national boundaries, international rules and cooperation will remain unavoidable.

There is also the increasingly important issue of orbital congestion and space debris. The more satellites we put into orbit, the more important responsible space operations and tracking will become.

So the next decade will probably not be a smooth upward trajectory.

There will be failures, consolidation, companies that run out of money and technologies that don't work commercially.

That is normal for an emerging industry.

From a space programme to a space economy

What I find most interesting about India's current space story is not any single rocket or satellite.

It is the change in the structure of the industry.

A decade ago, if someone had asked me about India's space sector, I would probably have thought primarily about ISRO and its missions.

Today, the picture is much broader.

There are rocket companies trying to build commercial launch services. Satellite companies are building constellations. Data companies are turning imagery into intelligence. Startups are experimenting with orbital computing and space situational awareness. Large engineering companies are entering manufacturing. Government agencies are transferring technology to industry. Investors are putting capital into the sector.

And ISRO itself is preparing for increasingly ambitious missions.

That is how an ecosystem starts to emerge.

The next phase of India's space journey may therefore be less about proving that India can reach space. We already know that.

The bigger question is whether India can build a globally competitive industry around space—one that creates technology, manufacturing capability, high-skilled employment, exports and, ultimately, useful services on Earth.

The early signs are encouraging.

But the real test will be whether these companies can survive the transition from technology demonstrations to repeatable commercial businesses.

If they can, the Indian space story could become much bigger than rockets.

It could become one of the country's next important technology and industrial ecosystems.

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