India’s space sector is undergoing a fundamental transformation as policy reforms, private investment and growing strategic requirements reshape a domain once dominated almost entirely by the government.
From private launch vehicles and satellite manufacturing to earth observation, space-based communications and defence applications, Indian companies are beginning to assume a larger role across the space value chain.
In conversation with Anoop Verma, Lt. Gen. A.K. Bhatt (Retd.), Director General of the Indian Space Association (ISpA), discusses the impact of the post-2020 space reforms, the growing role of private industry in national security, technology transfers from ISRO, regulatory and manufacturing bottlenecks, and the need for assured government demand.
He also explains why sovereign space capabilities are becoming increasingly critical in modern warfare and outlines the opportunities and challenges as India seeks to build a $44 billion space economy by 2033.
Edited excerpts:
India’s space reforms since 2020 have opened the sector to private participation. From your vantage point, what has actually changed on the ground? How much of the policy momentum is now translating into flight-proven technologies, commercial missions and viable space companies?
In June 2020, the government announced that the space sector would be opened to private participation. The policy came subsequently, but one of the first major developments was the creation of IN-SPACe. The process of framing the policy itself involved extensive interaction with industry, and inputs were taken from stakeholders.
The key principle of the policy was that ISRO would increasingly focus on high-end technologies, research and development, and missions to outer space, while routine space activities could increasingly be undertaken by the private sector.
The Space Policy was followed by important changes in the FDI framework, while additional norms and guidelines have been issued from time to time. Parallel reforms have also taken place in related areas. The Telecommunications Act, for instance, provides for administrative allocation of spectrum for satellite-based services, while the geospatial framework has also been substantially liberalised. Together, these measures have contributed to opening up the space sector.
IN-SPACe itself is a unique organisation because it combines the roles of promoter, authoriser and regulator. This works to the industry’s advantage because promotion of the space ecosystem is an important part of its mandate, rather than its role being confined to regulation.
We are already seeing the results. In a relatively short period since 2020, private companies have developed launch vehicles and satellites incorporating new technologies. Companies are working on hyperspectral satellites, SAR satellites, reusable launch vehicles, space situational awareness, rendezvous operations and even in-space refuelling.
The government’s confidence in the private sector is also evident in defence programmes. Of the 52 satellites envisaged under the Satellite-Based Surveillance programme, 31 are expected to come from the private sector. These are significant developments and demonstrate how quickly the ecosystem is evolving.
Before we go further, could you tell us about the Indian Space Association and the role it is playing in the development of India’s private space ecosystem?
The Indian Space Association was formed following the Prime Minister’s interactions with space startups and companies after the sector was opened to private participation. During those discussions, he suggested the creation of an industry association that could act as a bridge between startups, established industry and the government.
ISpA was inaugurated on October 11, 2021, by the Prime Minister himself. The event was also attended by senior members of the government and national security establishment, reflecting the importance being attached to the space sector.
Our primary objective is to serve as a bridge between government and private industry and facilitate ease of doing business. We also work towards collaboration with academia, capability building, engagement with international companies and institutions, and interaction with the armed forces and other major users of space-based capabilities.
Ultimately, our objective is to help create a strong private space ecosystem in India and enable India to emerge as a significant global player in space.
Several states are developing their own space policies, industrial clusters and incentive frameworks. Is India moving towards a decentralised space economy? What role can states play in creating specialised manufacturing, R&D and startup ecosystems?
This is a very positive development. Two or three years ago, I used to think about how provinces in China had played an important role in developing different industries, including space-related capabilities. We are now beginning to see something similar happening in India.
States increasingly recognise the economic value of the space sector, and several leading states are competing to attract space companies. They are offering financial incentives, land at competitive rates, developing space parks and looking at the employment opportunities that this industry can generate.
Karnataka, Tamil Nadu and Gujarat are among the leading states in this area, and several other states have either announced or are developing their own policies. This competition between states can become a major positive force for the growth of India’s space industry.
India has traditionally been known for cost-effective space missions. As the global commercial space economy expands, where can India build a durable competitive advantage?
India has opportunities across virtually every segment of the space economy. But if I were to prioritise them, one of our biggest strengths is in downstream applications.
A major part of the space economy lies in applications—in agriculture, healthcare, disaster management and several other sectors. India has a traditional advantage here because of the strength of our IT industry. I am confident that India can become globally competitive in space-based analytics and applications.
We also have the potential to be highly competitive in satellite manufacturing, components and launch services because of our cost advantages. If Indian private launch companies are able to mature their technologies and launch regularly, they can attract considerable business because there are still relatively few commercial launch providers globally.
Reusable launch vehicles will become particularly important because reusability can substantially reduce launch costs. This is an area where Indian companies are also working towards developing capabilities.
Your experience as Director General Military Operations gives you a distinctive perspective on the strategic dimension of space. How do you see private capabilities in earth observation, satellite communications and geospatial intelligence becoming integrated with India’s national security architecture?
Even when I was in service, the Indian armed forces took a forward-looking decision by creating the Defence Space Agency. Ultimately, this could evolve into a Space Command and perhaps, at some stage in the future, even a Space Force. Its creation was a recognition that space has become a critical domain of warfare.
Space enhances war-fighting capabilities in the traditional domains of land, air and sea. Intelligence, surveillance and reconnaissance, positioning, navigation and timing, and satellite communications are all critical to military operations.
ISpA has worked closely with the Ministry of Defence in this area. Seventy-five Defence Space Challenges were identified, essentially reflecting the armed forces’ requirements for future space technologies across areas such as communications, launch services and PNT.
This has given the private sector clarity about the capabilities that the armed forces require. It has also provided financial support through different challenge mechanisms. Of the 75 challenges, contracts have already been signed for a substantial number of them.
The private sector is therefore increasingly being integrated into the development of capabilities for the armed forces. The plan for private-sector participation in the proposed constellation of defence satellites is another major example of this shift.
Recent conflicts have demonstrated the importance of satellites, commercial imagery, resilient communications and space-based intelligence in modern warfare. What lessons should India draw while developing its defence-space capabilities?
Recent conflicts reaffirm what many militaries were already anticipating—that commercial and private space capabilities can become critical components of warfare.
The Ukraine conflict demonstrated this very clearly. Russia targeted satellite communication infrastructure at the beginning of the conflict, while Ukraine was subsequently able to maintain communications with support from commercial satellite systems. Commercial companies also provided satellite imagery and ISR capabilities.
The important lesson is that even a country without extensive sovereign space assets can access significant capabilities through commercial providers. Space-based systems are increasingly important for communications, ISR, navigation and even the guidance and effectiveness of weapon systems.
At the same time, there is another important lesson for India: during an actual conflict, access to foreign commercial capabilities cannot always be guaranteed. Commercial imagery or other services available during peacetime could potentially be restricted during a crisis.
That makes self-reliance in the space domain extremely important. India needs sovereign capabilities that it can depend upon during a conflict.
ISRO has accumulated decades of intellectual property, technology and engineering expertise. How can technology transfer and commercialisation be accelerated while allowing ISRO to concentrate on strategic and scientific objectives?
Around 120 technologies have already been transferred to the private sector, and some of these technologies are finding applications not only in space but in other sectors as well.
More importantly, steps are being taken towards transferring mature launch-vehicle technologies to private industry. Expressions of interest and other processes have been initiated for transferring technologies associated with launch vehicles to the private sector.
The new spaceport being developed at Kulasekarapattinam is also envisaged to have significant private-sector involvement in its operations and maintenance. Similarly, technologies related to satellite buses and other systems developed by ISRO can increasingly move to private industry.
This is consistent with the objective of the Space Policy. ISRO should increasingly focus on advanced R&D and ambitious missions such as Gaganyaan and deeper-space exploration, while technologies that have matured can be transferred to industry for commercialisation.
India also possesses something even more valuable than individual technologies—the heritage and experience created through more than six decades of ISRO’s work. India has demonstrated that it can compete with the world’s leading space powers. That accumulated expertise is an enormous advantage for the emerging private ecosystem.
Looking towards 2030 and beyond, what are the major regulatory, financing and industrial bottlenecks that could prevent India from capturing a larger share of the global space economy?
On the regulatory side, we have moved from a situation where there was virtually no framework for private participation to a very forward-looking policy. The Space Policy essentially allows the private sector to participate across communications, PNT, remote sensing and even deep-space activities.
However, we still do not have a comprehensive Space Act. I understand that the draft is at an advanced stage. Such legislation will be very important because it can formally define the regulatory role of IN-SPACe and provide clarity on issues such as liability and insurance.
This clarity is particularly important for international investors and companies looking at India. The sooner the Space Act comes, the better it will be for the ecosystem.
There are also industrial bottlenecks. In satellite manufacturing, particularly in sensors and certain electronic components, we continue to depend on foreign supply chains. India’s limitations in semiconductor and chip manufacturing also affect the space sector. Developing indigenous capabilities in these areas will be important for reducing external dependencies.
Another requirement is effective single-window clearance. Space companies currently have to interact with multiple ministries and departments, including the Department of Space and the Department of Telecommunications. A single-window mechanism has been announced, but it needs to work effectively in practice.
Finally, assured government demand will be extremely important. The government is one of the largest users of space-based capabilities. Predictable demand from government agencies can enable Indian companies to scale up, establish manufacturing capacity and eventually compete globally.
What kind of economic growth do you expect from India’s space sector over the coming years, and how large can the industry become?
ISpA has undertaken its own studies, but one of the widely followed assessments is the study undertaken by PwC for IN-SPACe.
The broad ambition is to significantly increase India’s share of the global space economy. The Indian space economy has the potential to reach around $44 billion by 2033. That would represent a substantial expansion from where the industry stands today.
The combination of government reforms, private-sector investment, technology transfer, growing domestic demand and India’s inherent cost advantages provides a strong foundation. The opportunity now is to convert these advantages into scale and build Indian companies that can compete globally.
