ISRO Mulls Exiting Manufacturing Amid India’s Push To Promote Privatisation In The Space Industry

ISRO is planning to exit the manufacturing of launch vehicles and routine satellites, transferring that responsibility to private companies and public-sector undertakings, per Inc42. IN-SPACe chairman Pawan Goenka made the announcement at the Business Today summit, stating plainly: "ISRO will not make any launch vehicles and will not manufacture any launch vehicles. That will all be done by the private sector or PSU."

The transition is already underway. Technology for the Small Satellite Launch Vehicle (SSLV) is being transferred to Hindustan Aeronautics Limited (HAL), according to Inc42. The next targets are the Polar Satellite Launch Vehicle (PSLV) and the Launch Vehicle Mark-3 (LVM3) — India's most powerful operational rocket, capable of carrying up to 4,000 kg to geosynchronous transfer orbit. IN-SPACe has begun inviting private-sector players to take over end-to-end realisation, operation, and commercialisation of the LVM3. Unlike the SSLV transfer, public-sector companies will not be allowed to participate in the LVM3 process. Goenka noted that 120 technologies have already been transferred to the private sector.

Under the new model, ISRO will refocus on R&D, advanced technologies, scientific missions, and specialised infrastructure — functioning more as a research body than an end-to-end manufacturer. The government is also planning to transfer operations of a new launch centre to private industry, with an operator to be selected within the next four to five months, per Inc42.

The policy shift reflects rapid growth in India's private space ecosystem. The number of spacetech startups rose from single digits in 2019 to more than 400 by early 2026, per government data cited by Inc42, with companies building across launch vehicles, satellites, payloads, ground infrastructure, and space-data services. Skyroot Aerospace, India's only spacetech unicorn, became the country's first private company to reach orbit with its Vikram-1 launch vehicle in July 2026. IN-SPACe's launch support schemes also provide subsidies and access to government infrastructure for private companies to lower cost barriers.

The government is simultaneously positioning itself as an anchor customer: the Department of Defence has placed an order for 31 satellites with private companies, while ISRO is expected to build 21 more under the same programme. The broader ambition, as Inc42 reports, is to grow India's space economy from roughly $8 billion today to $44 billion by 2033, with private-sector activity and exports expected to carry an increasing share of that growth.