India’s space reforms expand commercialisation and not merely privatisation, preserving ISRO’s core mandate and state control over strategic R&D
Since 2020, the Indian government has enacted space reforms, supplemented by the geospatial policy, the space policy, the streamlining of non-governmental financing mechanisms, and a wide range of support and encouragement for space-domain innovation. The sentiment within the innovation ecosystem has remained optimistic, with little to no awareness of the tribulations the reforms overcame.
The Indian Space Research Organisation (ISRO) was, for an extended period, unable to delegate its outputs and thus became the comprehensive assembler of launch vehicles, satellites, and spacecraft. This occurred at a time when the majority of leading spacefaring nations, such as China and the United States (US), had transitioned to full-scale commercialisation. The reforms introduced through the 2023 National Space Policy explicitly appointed ISRO to focus “...research and development of new space technologies and applications, and for expanding the human understanding of outer space.” Few within the ecosystem may have been aware of the increasing political pressures exerted on ISRO and the Department of Space to desist from implementing reforms other than the one attempted, the disruptive rechartering of ISRO.
The Indian Space Research Organisation (ISRO) was, for an extended period, unable to delegate its outputs and thus became the comprehensive assembler of launch vehicles, satellites, and spacecraft.
Understanding the timeline concerning the space reforms is of paramount importance. First announced in May 2020 as part of the Aatmanirbhar Bharat package, these reforms encountered resistance from some workers who sought to classify ISRO as an ‘industry’ under the provisions of the Industrial Disputes Act of 1947. However, this intent is contradictory since ISRO is known worldwide as a space agency led by space-domain scientific and technological experts and operates as a strategic scientific R&D institution under the central government's jurisdiction; its employees are governed by the Central Civil Services Rules, which prohibit union-like activities, and it is not a public-sector enterprise. When the Industrial Relations Code, 2020, received presidential assent on 28 September 2020, the government designated the sovereign activities of the space, atomic energy, and defence sectors as non-industry sovereign pursuits. However, some workers opposed this move too and launched an anti-privatisation drive as the Industrial Relations Code legislatively prevented ISRO from being deemed an industry. The agenda has been reinforced from the portrayal of the space reforms as ‘privatisation’ in the media, which has often been used interchangeably with ‘commercialisation’, even though they have different meanings. The vision of the Indian Space Policy 2023 clearly states the following:
“To augment space capabilities; enable, encourage and develop a flourishing commercial presence in space; use space as a driver of technology development and derived benefits in allied areas; pursue international relations, and create an ecosystem for effective implementation of space applications among all stakeholders; for, the nation’s socio-economic development and security, protection of environment and lives, pursuing peaceful exploration of outer space, stimulation of public awareness and scientific quest.”
The policy document explicitly emphasises the equal importance of endeavours undertaken by both the public and private sectors, advocating increased private-sector participation and contributions through commercial space innovation compared with the period before 2020. It further underscores that ISRO should concentrate on high-end R&D activities, which are difficult for the private sector, and on the transfer of mature technologies and innovations for subsequent commercialisation. Furthermore, the award of the contract for the commercial construction of the Small Satellite Launch Vehicle to Hindustan Aeronautics Limited, coupled with its superior performance against competing entities—Adani Aerospace and Defence and Bharat Dynamics Limited—demonstrates the government’s unwavering commitment to the commercialisation of the space sector rather than privatisation, contrary to under-evaluated perceptions. These perceptions add fuel to the goals of such quarters.
The policy document explicitly emphasises the equal importance of endeavours undertaken by both the public and private sectors, advocating increased private-sector participation and contributions through commercial space innovation compared with the period before 2020.
The government’s endeavour to commercialise the space sector aims to establish contingency measures to address India’s continually expanding space requirements. In light of supply chain constraints, the government has sought to develop options to ensure the successful delivery of mission-critical products. ISRO remains committed to its fundamental objective as a space agency despite efforts to deem it as an industry; however, the responsibility for safeguarding R&D activities does not end here.
Indian space startups will remain Indian, and their intellectual property will stay in the national interest only if domestic patient capital is mobilised in their support across stages—from pre-seed to later-stage funding rounds. The INR 10,000 crore Startup India 2.0 Fund of Funds, the INR 1,00,000 crore Research, Development, and Innovation Fund (RDI), and the INR 1,000 crore Antariksh Venture Capital Fund for space-tech promotion all testify to the central government’s financial commitment to innovation. The focus should be on providing anchor and patient capital that attracts reluctant private capital of Indian origin to invest equally or more. However, mere commitment is not enough; investing wisely and quickly is necessary. It has been one year since the Antariksh Venture Capital Fund, managed by SIDBI, commenced operations, and its first investments are scheduled for 2027, a two-year delay. Such investment sluggishness does not help the national space programme.
The global geopolitical landscape and the escalating civil-military integration within the international space sector constrain India’s capacity to remain indifferent to foreign capital and to the potential for foreign expropriation of intellectual property developed in India by Indians. In April 2026, Ray Dalio, the founder of the renowned hedge fund Bridgewater Associates, predicted in his Time Magazine opinion piece that the world would enter a perilous phase of capital warfare, resulting from the collapse of the global monetary order. As these conflicts over capital intensify, debt ownership will be amplified, monetary flows will be stringently regulated, and innovation will be excessively safeguarded. The Indian government is the primary provider of the significant financial support required for ISRO-led R&D at low technology readiness levels, a critical source of capital for mid- and high-TRL R&D conducted by private startups, and the procurer of space-defence innovations for the armed forces.
The benefits of commercialisation substantially exceed those of privatisation, a fact that the architects of space reforms must communicate effectively through various channels.
The government’s role in space R&D remains unwavering. It continues to serve as the primary supporter of the civilian, commercial, and defence space sectors. It is unwise to assume that India’s space sector has been fully privatised, and it would be equally incorrect to allow such an assumption to dominate biased political discourse or to hinder progress through physical obstruction as was seen in the case of an ISRO cargo being blocked by workers over ‘growing wages’ in Thiruvananthapuram, Kerala, in September 2021. Indeed, concerns regarding external influence are legitimate and must be addressed cautiously by the government as it advances the commercialisation of space R&D in the national interest, fostering a sense of national, societal, and Indian civilisational trusteeship in space enterprises. The benefits of commercialisation substantially exceed those of privatisation, a fact that the architects of space reforms must communicate effectively through various channels. It is also vital to emphasise the importance of fostering a strong awareness of sovereignty within the startup ecosystem, as these entities are the agile alter ego of ISRO, which navigates internal constraints while focusing on high-end R&D pursuits in the national interest.
Chaitanya Giri is a Fellow at the Centre for Security, Strategy, and Technology at the Observer Research Foundation.
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Dr. Chaitanya Giri is a Fellow at ORF’s Centre for Security, Strategy and Technology. His work focuses on India’s space ecosystem and its interlinkages with ...
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