Maarg Manthan · Topic 12.10

Private Sector Participation and Public-Private Collaboration in Space

Science & Technology › Space Technology and ISRO · Topic 12.10

Until 2020 India's space activity was almost entirely run by government, and private firms worked mainly as suppliers to ISRO. Reforms announced in June 2020 opened the sector, created the Indian National Space Promotion and Authorisation Centre, IN-SPACe, as a single window agency, and led to the Indian Space Policy 2023, which defines the roles of ISRO, NewSpace India Limited and IN-SPACe. In February 2024 the Government liberalised foreign direct investment in space, allowing up to 74 per cent through the automatic route for satellites, 49 per cent for launch vehicles, and up to 100 per cent for components. India now has more than two hundred space start-ups, including Skyroot Aerospace, Agnikul Cosmos, Pixxel and Dhruva Space.

5 min read · UPSC Prelims · Science & Technology · Space Technology and ISRO

At a Glance

Reform year 2020
Regulator IN-SPACe
Policy Indian Space Policy 2023
FDI Up to 74 per cent for satellites
First private rocket Vikram-S, 2022
Exam link UPSC Prelims, Science & Technology: Space Technology and ISRO

Where Does It Fit?

This topic follows the missions of other agencies. It describes how India is changing its own system so that companies can build rockets and satellites, as other countries have done. Previous topic: NASA, ESA, Roscosmos, JAXA and CNSA Space Missions. Next topic: Space Technology Innovations: Nanosatellites, Electric Propulsion, Satellite-Based Internet.

What Are the Reforms and Policy Changes?

Step	Details
June 2020 reforms	The Government opened the space sector to private participation in launch, satellites and services, and set up IN-SPACe
IN-SPACe	Authorises private missions, shares ISRO facilities and technical help, and promotes the industry
NewSpace India Limited	Takes up commercial production and services, such as satellite manufacture and launch with industry
Indian Space Policy 2023	Says ISRO will concentrate on research and advanced technology, while commercial activities move to industry and NSIL
FDI liberalisation, 2024	Up to 74 per cent automatic for satellites manufacture and operation, 49 per cent automatic for launch vehicles and spaceports, 100 per cent for components, with higher shares through the government route
Venture capital fund	The Government approved a fund of about Rs 1,000 crore for space start-ups in 2024
Space activities bill	A law to regulate private space activity is being prepared. Check the latest status

Which Companies and Collaborations Are Important?

Skyroot Aerospace: launched Vikram-S in November 2022, the first private rocket from India, a suborbital test. Developing Vikram-1 orbital rocket
Agnikul Cosmos: flew Agnibaan SOrTeD in May 2024 from its own launch pad at Sriharikota, with a single piece 3D printed semi-cryogenic engine
Pixxel: a Bengaluru start-up that builds hyperspectral imaging satellites
Dhruva Space: makes satellites and ground stations
Bellatrix Aerospace: works on electric propulsion for satellites
Larsen and Toubro with HAL: a consortium to build PSLV rockets in India for NSIL, the first such industry built PSLV
SSLV technology transfer: Hindustan Aeronautics won the bid for technology transfer of the Small Satellite Launch Vehicle in 2025. Check the status
Established firms: Godrej, Alpha Design, Ananth Technologies and others have supplied parts to ISRO for decades

What Else Should You Remember?

Why private sector: to raise launch rate, cut costs, bring investment and create jobs, while ISRO focuses on research
Global example: SpaceX showed how a private company can drive reusable rockets and lower launch cost
Space economy size: India’s space economy is estimated at around 8 billion dollars and the Government aims to raise its share of the global space economy several fold by 2033
IN-SPACe Technical Centre: a facility in Ahmedabad to help private companies with testing and technology
Sriharikota access: private firms can use ISRO launch pads and test facilities for a fee
Kulasekarapattinam: a new spaceport in Tamil Nadu is being built for small satellite launches
Satellite broadband: rules on satellite communication spectrum and licences are being developed, as in Space Technology Innovations: Nanosatellites, Electric Propulsion, Satellite-Based Internet
Demand drivers: Earth observation data, communication, defence and agriculture are the main users
Defence role: the Defence Space Agency and iDEX encourage private firms to supply defence needs
Risks: liability for accidents, debris and cybersecurity need rules
Space Liability: India is a party to the Liability Convention of 1972, under which the launching State is liable for damage
Link: institutions are explained in ISRO’s Space Research Programme and ANTRIX Corporation
Public-private partnership model: NSIL and industry share work, ISRO gives design and training, and industry builds hardware and takes on the risk of production
Skills and jobs: a larger space sector needs engineers, technicians and data experts, so universities are adding space courses and incubators

Why Does It Matter for the Exam?

Institutions and years: IN-SPACe 2020, Space Policy 2023
FDI limits: 74 per cent, 49 per cent and 100 per cent
Firsts: Vikram-S 2022 and Agnibaan 2024
Current affairs link: space start-ups and satellite internet
Common errors: confusing NSIL, Antrix and IN-SPACe

As an analytical point, private participation can speed up launches and innovation, but it needs clear regulation, liability rules and fair access to government facilities.

Why Is This Topic Important?

Reforms 2020 to 2024
Firms Start-up names
Rules FDI limits

What Came Next?

The next topic covers new space technologies such as nanosatellites, electric propulsion and satellite internet. Next topic: Space Technology Innovations: Nanosatellites, Electric Propulsion, Satellite-Based Internet.

Key People and Terms

IN-SPACe Authorisation and promotion centre
NSIL Commercial public company
FDI Foreign direct investment
Start-up New innovative firm
iDEX Innovations for defence excellence
Liability Convention 1972 treaty on damage

Exam Corner

Points to Remember

IN-SPACe: 2020.
Space Policy: 2023.
FDI for satellites: up to 74 per cent automatic.
Vikram-S: November 2022.
Agnibaan: May 2024.

Do Not Confuse With

Skyroot and Agnikul Vikram series versus Agnibaan
NSIL and IN-SPACe Commercial company versus authoriser
Launch vehicle FDI and satellite FDI 49 versus 74 per cent

Memory Hook

Twenty opened the door, twenty-three set the policy, twenty-four moved the FDI; Skyroot flew, Agnikul printed.

Mains Angle

Questions ask about institutions, FDI and start-ups. These points help.

Reasons Cost and growth
Reforms IN-SPACe and policy
Challenges Regulation and liability

A Question You May Face

An original practice question, not a past paper question.

“Discuss the reasons for opening India’s space sector to private companies and the challenges in building a strong commercial space ecosystem.”

How to Answer

Reasons Cost, growth.
Reforms 2020 to 2024.
Examples Skyroot, Agnikul.
Challenges Law, finance.

GS Relevance

Prelims: IN-SPACe, FDI limits, start-up names and firsts, space policy. GS Paper 3: science and technology, space economy, investment.

Frequently Asked Questions

What is IN-SPACe?

The Indian National Space Promotion and Authorisation Centre, IN-SPACe, is an agency created in June 2020 under the Department of Space. It acts as a single window to authorise, promote and regulate private space activities, helps companies to use ISRO facilities, and works with NewSpace India Limited and ISRO under the Indian Space Policy 2023.

What are the FDI limits in the Indian space sector?

Under the policy announced in February 2024, foreign direct investment is allowed up to 74 per cent under the automatic route in satellite manufacture and operation, up to 49 per cent in launch vehicles and spaceports, and up to 100 per cent in components and sub-systems, with investment above these limits needing government approval.

Which was India's first private rocket launch?

Vikram-S, built by Skyroot Aerospace, was India's first privately developed rocket to be launched, from Sriharikota in November 2022. It was a single stage suborbital test of technology. Agnikul Cosmos followed in May 2024 with Agnibaan SOrTeD, powered by a 3D printed semi-cryogenic engine.

What does the Indian Space Policy 2023 say?

The Indian Space Policy 2023 defines the roles of different bodies. ISRO will focus on research and development of advanced technologies and missions, NewSpace India Limited will carry out commercial activities, and IN-SPACe will authorise and regulate private entities. The policy encourages private participation in all space activities.

Why is private participation important for space in India?

Private participation can increase the number of launches, reduce costs, bring in investment and create jobs, while ISRO concentrates on research and strategic missions. It also helps India to grow its share in the global space economy, which is dominated by a few countries and fast-growing private firms.

PYQ Practice — Statement Analysis

1 IN-SPACe was set up in 2020 to promote and authorise private space activities.

True

A single window agency.

2 Vikram-S was built by Agnikul Cosmos.

False

It was built by Skyroot Aerospace.

3 The 2024 policy allows up to 74 per cent FDI in satellites through the automatic route.