I was discouraged from taking bold decision to privatise space sector, today you proved me right: PM Modi to Skyroot after Vikram-1 successful launch
Following Skyroot Aerospace's successful Vikram-1 orbital launch, the government highlighted that its 2020 decision to open the space sector to private participation, though met with institutional caution at the time, has been validated by India's emergence as the third country with independent private orbital launch capability, after the United States and China.
Officials noted that ending ISRO's exclusive hold over launch and satellite operations was a departure from decades of state-monopoly practice in a strategically sensitive sector, and that the reform initially drew scepticism regarding safety, regulatory readiness and commercial viability.
The government pointed to dedicated funding and single-window regulatory mechanisms introduced since 2020 as having enabled the shift of private firms from being component suppliers to ISRO toward independently designing, building and flying their own launch vehicles.
The launch was presented as a marker event for India's space-technology startup ecosystem, which has expanded from a handful of firms in 2014 to close to 200 registered space-tech startups by the mid-2020s.
The 24 June 2020 Cabinet Decision to Open the Space Sector
Prior to 2020, private participation in India's space sector was largely confined to supplying components and sub-systems to ISRO under government contracts; end-to-end activities such as satellite operation, launch vehicle development and space-based service delivery remained an ISRO/government preserve. On 24 June 2020, the Union Cabinet approved sweeping reforms permitting Non-Government Entities (NGEs) to undertake the full space activity value chain, including building and owning launch vehicles, and simultaneously approved the creation of a dedicated authorisation body for private space activity.
Key Details
- The Indian National Space Promotion and Authorisation Centre (IN-SPACe) was established the same day, 24 June 2020, as the single-window nodal agency authorising and supervising private ("Non-Government Entity") space activities.
- The 2020 reform was formalised and elaborated three years later through the Indian Space Policy 2023, approved by the Union Cabinet on 6 April 2023, which delineated roles across the Department of Space, ISRO, IN-SPACe and NewSpace India Limited (NSIL).
- The reform marked a shift from a decades-old model in which ISRO alone could build and fly Indian rockets, to one in which private firms may legally develop and operate independent launch vehicles from Indian soil.
Vikram-1's independent orbital launch is presented as the practical vindication of the 24 June 2020 decision — a private company progressing from parts-supplier status to fully independent rocket developer within roughly six years of the sector being opened.
IN-SPACe Funding Instruments — Technology Adoption Fund and Seed Fund Scheme
Beyond regulatory authorisation, the government has instituted direct funding mechanisms to reduce financial risk for space-tech startups attempting capital-intensive hardware development such as launch vehicles. These schemes are administered through IN-SPACe under the Department of Space.
Key Details
- The Technology Adoption Fund (TAF) has a corpus of Rs 500 crore and provides financial support of up to 60% of project cost for startups and MSMEs (40% for larger industry), capped at Rs 25 crore per project, aimed at helping early-stage space technologies transition into commercially viable products.
- The IN-SPACe Seed Fund Scheme was operationalised in August 2024 with a corpus of Rs 1,000 crore, providing grants of up to Rs 1 crore to eligible early-stage space-sector startups.
- These instruments complement liberalised FDI norms for the sector, which permit up to 74% automatic-route foreign investment in satellite manufacturing/operation and up to 49% automatic-route investment in launch vehicles and spaceports.
Government funding schemes of this kind are cited as part of the enabling ecosystem behind Vikram-1, illustrating that the 2020 policy shift was accompanied by concrete risk-sharing instruments rather than regulatory permission alone.
International Precedent — NASA's Commercial Orbital Transportation Services (COTS) Programme
India's model of a state space agency ceding operational exclusivity while providing anchor funding and demand draws comparison with NASA's Commercial Orbital Transportation Services (COTS) programme, launched in 2006, under which NASA provided seed funding and milestone-based payments to private firms to develop cargo resupply capability for the International Space Station, rather than building the vehicles itself.
Key Details
- COTS funded early development work at companies including SpaceX and Orbital Sciences Corporation; SpaceX's Falcon 1 became the first privately developed liquid-fuelled rocket to reach orbit in September 2008.
- COTS was later followed by Commercial Resupply Services (CRS) contracts, converting the demonstrated capability into recurring commercial contracts for NASA's ISS cargo needs.
- The COTS model — public seed funding plus guaranteed anchor demand to de-risk private hardware development — is frequently cited internationally as a template for how a state space agency can catalyse a private launch industry rather than compete with it.
India's IN-SPACe funding instruments and its policy of allowing private firms access to ISRO's Sriharikota launch infrastructure mirror the broad institutional logic of the COTS approach, applied roughly a decade and a half after the American precedent.
- Union Cabinet approved private-sector space reforms on 24 June 2020; IN-SPACe was established the same day.
- Indian Space Policy 2023 approved by the Union Cabinet on 6 April 2023.
- Technology Adoption Fund: Rs 500 crore corpus; up to 60% of project cost funded for startups/MSMEs, capped at Rs 25 crore per project.
- IN-SPACe Seed Fund Scheme: operationalised August 2024, Rs 1,000 crore corpus, grants of up to Rs 1 crore per eligible startup.
- India's registered space-tech startups grew from roughly one in 2014 to close to 200 by the mid-2020s.
- NASA's COTS programme launched in 2006; SpaceX's Falcon 1 became the first privately developed rocket to reach orbit in September 2008.
- Skyroot Aerospace was founded in 2018 by former ISRO scientists Pawan Kumar Chandana and Naga Bharath Daka, and is headquartered in Hyderabad.
- Vikram-1's successful launch makes India the third country, after the United States and China, where a privately developed rocket has independently reached orbit.