Editorial Notes

[Editorial Notes] A new frontier for Space startups

The government’s new reforms in the space industry seem optimistic to tackle challenges and transform the strategic space sector to an active global leader.
By IASToppers
June 10, 2020


  • Introduction
  • New Reforms
  • Need for the move
  • Significance
  • Way Forward
  • Conclusion

A new frontier for Space startups

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The Finance Minister has announced a ground-breaking initiative by opening up space and atomic energy to private players, referring to them as “fellow travellers’’. The Indian government’s active intervention in the space industry is a testimony to the urgency with which India is ready to tackle challenges and transform the sector into an active global leader rather than a passive bystander. 

New Reforms:

  • The fourth tranche of Atma Nirbhar Bharat Abhiyan opened up the facilities of Indian Space Research Organisation (ISRO) for private sectors.
  • Private firms are allowed in the fields of satellite and other space based services like planetary exploration and outer space travel.
  • Other reforms include the levelling of the playing field for private companies in satellites, launches and space-based services by introducing a predictable policy and regulatory environment to private players and providing access to geospatial data and facilities of ISRO.

Need for the move:

  • ISRO’s annual budget has crossed ₹10,000 crore ($1.45 billion), growing steadily from ₹6,000 crore five years ago.
  • Still, the demand for space-based services in India is far greater than what ISRO can supply.
  • Private sector investment is critical, for which a suitable policy environment needs to be created.
  • A national legislation is needed to ensure overall growth of the space sector and facilitate ISRO’s partnership with industries and entrepreneurs.
  • From its initial days of civilian applications for remote-sensing, meteorology and communication, India’s space sector has hugely evolved and expanded to include broadband services, space exploration, space-based navigation, defence and security applications.
  • ISRO has gradually been opening up to the Indian private space sector in the past few years, as it ran out of in-house capacity to address India’s growing requirements in the space industry.


  • Utilising ISRO’s world-class infrastructure (testing and manufacturing facilities) for the private sector can go a long way in saving unnecessary costs and making the industry more competitive.
  • The current efforts will focus on creating a competitive playing field where new players can receive support from ISRO and flourish.
  • The support to private sector industries including start-ups will unleash their potential to engage and prosper in the space exploration industry.
  • With a remarkable talent pool and some great start-ups already operating outside the ISRO ecosystem, the entry of the private sector can bring several advantages in terms of cost and access to the industry.

Way Forward:

1. Allocating Funds:

  • The crucial issue of funding is the first bottleneck that needs to be addressed.
  • The early-stage innovations must be supported by the government through “adventure” capital and long term “patient” capital, not just risk-averse venture capital.
  • There is a need for public-private partnership in financing too, not just in the development.

2. Public procurement policy:

  • The startups need a head start in the market and the current public procurement system is heavily loaded against them.
  • The lowest-cost-selection approach must change to lower total cost of ownership.
  • This requires creating an innovative public procurement policy for startups.

3. Innovation ecosystem:

  • India needs to create a robust space tech-startup national innovation ecosystem comprising incubators, accelerators, scalerators and mentors.
  • ISRO has a pivotal role in anchoring this initiative.
  • There must be synergy with the government’s flagship programmes such as Digital India, Startup India, Make in India, Smart Cities Mission, etc.

4. Legislation:

  • There is an urgent need for a clear law that allows private players to participate across the space value chain and not just bits of it.
  • The draft Space Activities Bill, introduced in 2017, has lapsed. This is an opportunity to rewrite it with a bold perspective.


The move is an enticing prospect for commercial players seeking a fair share of the lucrative space manufacturing in terms of satellites, propellant technologies and other areas. Since, space is a strategic sector, India needs an ensuing legislation that encourages private initiative, investment, management and technological input. Along with being Atma Nirbhar, India needs atma-vishwas (self confidence) with bold policies and determined actions to pole vault to a great new future.

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