ISRO Mulls Exiting Manufacturing Amid India’s Push To Promote Privatisation In The Space Industry

Adding to the central push of opening the space sector to the public, the Indian Space Research Organisation (ISRO) is now reportedly looking to gradually move away from manufacturing launch vehicles and routine satellites and involving the private sector for the same.

The government plans on handing over mature space technologies to private companies and public-sector undertakings, IN-SPACe chairman Pawan Goenka said during the Business Today summit.

As per Goenka, the space agency would eventually stop manufacturing launch vehicles as production moves to industry. Under the new model, ISRO will now double down on R&D, advanced technologies, scientific missions and specialised infrastructure, while private players will take responsibility for commercial manufacturing and operations.

“ISRO will not make any launch vehicles and will not manufacture any launch vehicles. That will all be done by the private sector or PSU,” he said.

As per reports, the shift has already started with the Small Satellite Launch Vehicle (SSLV), whose technology is being transferred to Hindustan Aeronautics Limited (HAL). 

The next major opportunities are expected to involve the Polar Satellite Launch Vehicle (PSLV) and the Launch Vehicle Mark-3 (LVM3), India’s most powerful operational rocket. 

IN-SPACe has started inviting private-sector players as it looks to transfer LVM3 technology for its end-to-end realisation, operation and commercialisation. The rocket is set to carry up to 4,000 kg to geosynchronous transfer orbit, making the proposed transfer significant for India’s ambitions to build a commercial heavy-lift launch market. 

Reportedly, public sector companies will not be allowed to participate in the upcoming transfer process unlike the SSLV process. Goenka said that 120 technologies have already been transferred to the private sector. 

Going ahead, the space agency will focus on scientific missions, developing new technologies, specialised satellites and advanced infrastructure, resembling more of an an R&D firm than an end-to-end manufacturer. Once the technologies evolve, they can be transferred to private companies for commercial operations. 

As part of the process, the government is also planning to transfer operations of a new launch centre to the private industry, whose operator will be decided within the next 4-5 months. 

Startups Anchor Space Race

The move comes as India’s private space ecosystem is growing exponentially. As per government data, the number of spacetech startups increased from single digits in 2019 to more than 400 by early 2026, with startups now building niche offerings across launch vehicles, satellites, payloads, ground infrastructure and space-data services.

Amid this, launch capabilities have also begun showing. India’s only spacetech unicorn, Skyroot Aerospace, became India’s first company to develop an orbital-class launch vehicle, Vikram-1, that reached the orbit in July 2026.

The government is also trying to reduce the cost barriers for private space companies. IN-SPACe’s launch support schemes provide subsidies for private launches and access to government space infrastructure, with the broader programme aimed at making Indian launch services more competitive globally.

At the same time, the government is also turning into an anchor customer, with the department of defence placing an order for 31 satellites with private companies, while ISRO is expected to build 21 more under the same programme. 

The transition is central to India’s ambition of growing its space economy from around $8 Bn currently to $44 Bn by 2033, with exports and private-sector demand expected to play a larger role.

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