ISRO Rules Out Privatisation, Says Spacetech Startups Will Expand Ecosystem

The Indian Space Research Organisation (ISRO) has dismissed concerns that the Centre’s push to expand private participation in the space sector will result in its privatisation or diminish its role.

In a statement shared on X, the space agency termed reports and speculation about its future role “baseless and incorrect”.

“ISRO will neither be privatised nor will its importance be diminished,” the agency said, adding that it would remain India’s principal institution for advanced space research, technology development, national and strategic missions, space science, exploration, and critical capabilities. 

The clarification came after key ISRO employee associations wrote to chairman V Narayanan, seeking assurances over the institution’s future role, safeguards for its existing workforce, and the impact of the reforms on recruitment.

The concerns followed remarks by IN-SPACe chairman Pawan Goenka that ISRO would eventually stop manufacturing launch vehicles, with such activities being undertaken by private companies or PSUs.

Responding to the concerns, ISRO said greater private participation is aimed at expanding the country’s space ecosystem instead of replacing the government agency.

“Industry, startups and academia are being enabled to participate across the space value chain, complementing and multiplying ISRO’s capabilities. The reforms should therefore be seen as ecosystem expansion and capability multiplication, not privatisation,” it said.

ISRO added that transferring a mature technology does not mean it is withdrawing from the corresponding domain. Instead, such transfers allow industry to undertake large-scale production and commercialisation, while freeing the agency’s scientific and technical workforce to focus on advanced research and complex national missions.

Industry To Scale Production

Under the proposed division of responsibilities, the production of mature launch vehicles, routine satellites, and other established systems will increasingly be undertaken by private companies or PSUs through competitive processes.

ISRO, meanwhile, will focus on frontier R&D, advanced payloads, sensors, propulsion systems, human spaceflight, next-generation launch systems, deep-space and planetary missions, and strategic capabilities.

The transition has already begun with the transfer of Small Satellite Launch Vehicle technology to Hindustan Aeronautics. IN-SPACe has also initiated the process of involving private players in the end-to-end realisation, operation, and commercialisation of Launch Vehicle Mark-3.

ISRO said the institutional framework established following the space sector reforms gives each entity a distinct role. The Department of Space will provide policy direction, while ISRO will lead advanced research, technology development, and national missions.

IN-SPACe will facilitate and authorise the participation of non-government entities, while NewSpace India will commercialise mature technologies and capabilities.

Goenka also addressed the concerns on X yesterday, saying a “misleading narrative” had emerged around ISRO’s future role.

“Let me say it unequivocally: ISRO’s role is by no means diminishing. It will remain the bedrock of the Indian space sector,” he said.

Goenka said industry would increasingly manufacture and scale mature launch vehicles, satellites, and other systems, allowing ISRO to focus on advanced R&D, scientific and strategic missions, new technologies, and complex infrastructure.

“The direction is not a smaller ISRO. It is a larger Indian space ecosystem, with ISRO pushing the technological frontier,” he added.

Spacetech Startups Take Off

The number of Indian spacetech startups has grown from single digits in 2019 to more than 400 by early 2026. These startups are building capabilities across launch vehicles, satellites, propulsion, payloads, ground infrastructure, Earth observation, and space-data services.

Skyroot Aerospace emerged as India’s first spacetech unicorn after raising $60 Mn at a valuation of $1.1 Bn in May 2026. Two months later, the Hyderabad-based startup launched Vikram-1, marking India’s first private orbital rocket mission.

GalaxEye launched its maiden Mission Drishti in May this year to deploy an OptoSAR satellite combining optical and synthetic aperture radar imaging. However, the startup lost communication with the satellite following an anomaly linked to a geomagnetic storm. 

Earlier today, Pixxel raised $100 Mn in the largest single investment round for an Indian spacetech company. 

ISRO said private capital, manufacturing capacity, entrepreneurship, and access to global markets would be essential to increase the size of India’s space economy from around $8.4 Bn currently to $44 Bn by 2033. 

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