India’s space programme is entering one of its most significant structural transformations in decades. The Indian Space Research Organisation (ISRO), long known as the sole builder of India’s rockets and satellites, is now preparing to hand over routine manufacturing responsibilities to private industry and public-sector undertakings (PSUs) — a move that will fundamentally reshape how India builds its future in space.
The Big Announcement
The development was revealed by Dr. Pawan Goenka, Chairman of the Indian National Space Promotion and Authorisation Centre (IN-SPACe), while speaking at Business Today’s India @ 100 Economy Summit. In no uncertain terms, Goenka stated that “ISRO will not make any launch vehicles and will not manufacture any launch vehicles” going forward. Instead, that responsibility will shift entirely to private companies or PSUs, while ISRO transitions into a role centered on research, advanced technologies, scientific missions, human spaceflight, and specialised space infrastructure.
Starting With SSLV, Then PSLV and LVM3
This transition is already underway, beginning with the Small Satellite Launch Vehicle (SSLV) — a cost-effective rocket capable of placing satellites up to 500 kg into low-Earth orbit. In a keenly watched bidding process, Hindustan Aeronautics Limited (HAL) emerged as the winner, submitting a bid of ₹511 crore to secure full technology transfer rights for the SSLV. HAL beat out two competing consortiums, including one backed by the Adani Group’s Alpha Design Technologies, and another led by Bharat Dynamics Limited. Under the agreement, HAL will gain the ability to independently build, own, and commercially launch SSLVs once the two-year technology transfer process is complete.
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According to reports, this shift won’t stop with the SSLV. India’s other major launch vehicles — the PSLV and LVM3 — are also expected to eventually move toward private and PSU-led manufacturing, marking a much larger transformation of India’s entire launch vehicle ecosystem.
Why This Matters: The $44 Billion Space Ambition
This isn’t a random policy shift — it’s tied directly to India’s ambitious space economy target. The government aims to grow India’s space sector from its current size of around $8 billion to a staggering $44 billion by 2033. Achieving that scale would require far more manufacturing capacity than ISRO alone could realistically provide, making private-sector participation essential. As of March 2026, cumulative investment in Indian space startups had already reached approximately $618.5 million, with the funding landscape gradually shifting from early-stage seed rounds toward larger, growth-stage investments.
What Happens to ISRO Now?
Rather than stepping away from space entirely, ISRO’s role is expected to evolve significantly — shifting away from the routine, repetitive task of manufacturing operational rockets, and moving toward advanced R&D, complex scientific missions, and next-generation space technologies. This mirrors global trends, where national space agencies like NASA increasingly rely on private partners (such as SpaceX) for routine launch operations, while focusing their own institutional expertise on exploration and innovation.
The Road Ahead
With HAL now positioned to lead SSLV production and other private players — including the Adani Group, which remains active in India’s evolving space ecosystem — expected to compete for future opportunities, India’s space race is entering an entirely new phase. As ISRO steps back from day-to-day manufacturing, the next chapter of India’s space story will likely be written by a growing coalition of private companies, PSUs, and a research-focused ISRO working in tandem to help India cement its place among the world’s leading space economies.