India’s space agency ISRO is undergoing a strategic shift as the government delineates clearer roles for public and private players, aiming to expand the country’s space economy while safeguarding in-house expertise for critical missions.
Indian space policymakers are trying to draw a clearer line between what the state does and what private firms can do, after employee associations at the Indian Space Research Organisation raised alarms over the prospect of core functions shifting out of the agency. The concern was sharpened by remarks from IN-SPACe chairperson Pawan Goenka that ISRO would eventually stop manufacturing launch vehicles and would no longer run the spaceport now under development. ISRO chairperson V Narayanan has pushed back, saying the changes are meant to widen India’s space sector rather than privatise the agency itself.
The framework for that shift was set out in the Indian Space Policy 2023, which defined distinct roles for ISRO, IN-SPACe and NewSpace India Limited. According to the policy, ISRO is expected to focus on research, new technologies, data services and major human spaceflight goals, while moving away from the routine manufacture of operational systems. IN-SPACe was created as the nodal body to authorise private activity, promote industry participation and help firms access public facilities, while NSIL remains the commercial arm handling launches and space-based services.
That policy is now being reflected in concrete handovers. The small satellite launch vehicle, or SSLV, has already been operationalised, and Hindustan Aeronautics Limited won the transfer contract in 2025 for Rs 511 crore. The arrangement gives HAL a two-year hand-holding period in which it must build at least two rockets end to end using ISRO procedures before it can begin altering design and supply chains. The Polar Satellite Launch Vehicle was earlier commercialised through a consortium led by HAL and Larsen & Toubro, and the first of those rockets is expected to fly later this year or early next year. ISRO has also begun a new process for transferring LVM3 technology after an earlier commercialisation effort did not result in an award.
The shift is not limited to rockets. IN-SPACe has sought expressions of interest to run the coming small-satellite launch complex at Kulasekarapattinam in Tamil Nadu, with the selected operator to receive a year of technical guidance, training and operational support from ISRO. The broader policy also allows non-government entities to carry out end-to-end space activity, from satellites and launch services to ground infrastructure and related communication, remote sensing and navigation services. Mint reported that the government has paired the policy with support schemes such as seed funding, mentoring and access to ISRO facilities to encourage industrial capacity.
Officials and analysts say the logic is commercial as much as strategic. India’s share of the global space economy remains below 2%, even though the country has built one of the world’s most capable space programmes, because ISRO has traditionally concentrated on national priorities rather than market expansion. The government wants the sector to grow from about $9 billion in 2026 to as much as $40 billion to $45 billion over the next decade, while private investment has already risen sharply, according to figures cited by the government. Ajay Lele, deputy director general at the Manohar Parrikar Institute for Defence Studies and Analyses, told The Indian Express that the commercial drive is largely aimed at civilian space activity, but he said India must preserve in-house expertise for strategic missions and frontier science.
That point matters because ISRO still has an ambitious programme ahead. Among the agency’s headline missions are Gaganyaan, India’s first human spaceflight effort, which has yet to begin its first uncrewed flight, and the Bharatiya Antariksh Station, a planned modular space station that would give India a sustained human presence in low Earth orbit. ISRO also plans at least two lunar sample-return missions, another Mars mission, a Venus mission and, by 2040, a human lunar landing. Against that backdrop, the question is not whether the private sector will take on more work, but how much of the state’s technical core India is willing to keep in public hands.
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