Skyroot’s situation was dire, with its $1.5 million in funding dwindling rapidly, factories idle, and hardware development halted, leaving founders Pawan Kumar Chandana and Naga Bharath Daka with restless nights, and no functional rocket prototype to showcase, threatening the Hyderabad-based start-up’s survival within months.
That was 2020, during the Covid pandemic that affected the world. Six years later, much has changed. Skyroot is currently in the middle of an annus mirabilis, a year of miracles. Within a few months, it became India’s first space company valued at a billion dollars or more, achieved the rare feat of successfully launching a rocket on its first attempt, and helped India join the elite club of three nations with private companies capable of placing satellites into orbit.
India’s Private Space Race Takes Off
For a long time, the Indian Space Research Organisation (Isro) was the country’s only gateway to space. Every success or failure was tied to it. There was little to no ecosystem for private players, no formal policy framework, and hardly any support for entrepreneurs looking to turn ideas into businesses. But that is beginning to change as India’s private spacetech ecosystem matures.
Agnikul Cosmos has developed the world’s first 3D-printed rocket engine and has its own rocket launchpad operational. Pixxel Space builds satellites providing Earth observation data to clients like Nasa and the US Department of Defense. Bellatrix is taking a risk with very-low-earth-orbit satellites, a technology attempted by only a few other companies globally. Each of these companies aims for major technological or operational advancements this year.
“India’s private space ecosystem has come a remarkable distance in a relatively short time,” says Lt Gen (retd) AK Bhatt, director general of the Indian Space Association (ISpA). “India is emerging as a full-stack space economy, with growing strengths across launch, satellite infrastructure, and a range of downstream space applications.” India now boasts roughly 450 spacetech start-ups, a nine-fold increase from 47 in 2021. This growth is significant, considering the country had only one private space company in 2014.
While satellite launches were once Isro’s exclusive domain, times are changing. Non-Isro satellites have surged: 18 private satellites have been launched by six entities in the past five years, up from zero in 2021. These milestones are key for India’s space ambitions, especially as space infrastructure becomes as vital to modern economies and militaries as telecom networks, semiconductors, and energy systems. “Developing capabilities gives India greater control over critical infrastructure,” says Sireesh Pallikonda, co-founder of spacetech start-up Red Balloon Aerospace.
Legal Hurdles and Global Inspiration
When rocket start-ups like Skyroot and Agnikul began about a decade ago, some thought they were ‘illegal’ companies. India lacked laws or regulations allowing anyone other than Isro to launch rockets. During this time, Tushar Jadhav, co-founder of propulsion systems start-up Manastu, was trying to recruit an expert as an adviser. Though interested, the person was not convinced that it was legal for a private company to put anything into space. Almost everything related to space exploration was a strict state monopoly in India to safeguard sensitive national security assets.
“Spacetech was viewed as a highly specialised domain with very little public understanding,” says Jashank Pohani. In the US, disruptors like SpaceX and Planet Labs had proved that private enterprises could conquer space. And Chinese start-ups were beginning to raise serious capital and attempt launches.
While New Delhi realised that reforms in the space sector were urgently needed, it was still bogged down by its bureaucratic morass. Then came Covid-19. The world ground to a halt and businesses teetered on the brink. Before the year was halfway through, another shock arrived: the Galwan Valley clash, one of the bloodiest India-China confrontations in decades. These crises sharpened New Delhi’s anxiety over strategic dependence and accelerated the push for self-reliance. Across industries, the government rolled out schemes to strengthen domestic capabilities and reduce vulnerabilities in critical supply chains.
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Space was among the biggest beneficiaries. In June 2020, Finance Minister Nirmala Sitharaman unveiled a sweeping opening up of the sector, allowing private companies to conduct end-to-end space activities, including building rockets, launching satellites and providing downstream data services. For start-ups such as Agnikul, it was a watershed. “Suddenly, space got its atmanirbhar moment. That was a big stroke of luck,” co-founder Srinath Ravichandran reportedly said in 2021.
Policy Reforms Propel Spacetech
India’s space ecosystem essentially became a layered structure. Isro’s focus moved towards research and development for frontier technology and ambitious space missions. NewSpace India (NSIL), set up in 2019, became Isro’s commercial arm. It owns and operates commercial launches, and transfers Isro-developed technologies to industry. Meanwhile, the Indian National Space Promotion and Authorisation Centre (IN-SPACe) was created as a regulator, authorising private missions and sharing Isro’s infrastructure for nominal fees.
This momentum solidified into law with the Indian Space Policy of 2023. The easing of foreign direct investment (FDI) rules in 2024 made way for up to 100% FDI via the automatic route to pump global capital into Indian spacetech.
Talent Exodus from Isro
In the winter of 2004, millions of Indians were captivated by Swades. On screen, Shah Rukh Khan portrayed Mohan Bhargava, a brilliant engineer at Nasa. The film reflected a familiar belief: in the early 2000s, Nasa’s corridors were thought to be filled with Indian minds. Back then, choices were limited. Space was a state monopoly. Young, talented Indian engineers or scientists could either secure a rare spot at Isro or leave for Nasa or the European Space Agency. Today, the tide has turned in ways unimaginable in 2004.
In India, the Department of Space recently issued a directive: no scientist can resign from Isro without official approval. Reports indicate that many Isro scientists and engineers are quitting to join or found start-ups. They no longer face the choice between earning money abroad and staying in the country. Of the 20 most-funded spacetech start-ups in India, at least eight were founded by former Isro scientists, according to Tracxn. Both Skyroot co-founders are former Isro scientists. Chandana says that before starting Skyroot, he planned to spend his entire career at Isro and retire from there.
Challenges for Indian Spacetech Startups
Indian spacetech start-ups face significant hurdles in generating meaningful revenues. One major issue is the reluctance of prospective clients to invest in early-stage technology testing or pilots. Corporates often demand immediate, fully functional solutions or expect free trials, making it difficult for start-ups to secure funding. This contrasts with the U.S., where spacetech companies have achieved substantial revenues, with around 10 firms surpassing $100 million, a milestone yet to be reached by any Indian counterpart.
Another challenge lies in the product-market fit. Many founders develop solutions in isolation, only engaging customers once the product is complete. This approach overlooks commercial viability and customer willingness to pay. Additionally, Indian companies rarely collaborate with start-ups on research and development, partly due to limited private-sector R&D spending, which stands at 0.7% of GDP compared to 3–3.5% in the U.S. Government procurement delays and stringent eligibility criteria further compound these issues, hindering start-ups from scaling their operations.
Infrastructure constraints also play a role, with only two operational launch pads in Sriharikota, leading to long wait times for private satellite operators. This bottleneck limits launch frequency, with India conducting just 4–8 launches annually, compared to nearly 200 in the U.S. and 100 in China. These structural challenges collectively impede India’s spacetech sector from achieving the revenue growth seen in more mature markets.
