ISRO built India’s space programme. Can it survive its space reforms?

The red-brick, colonial-era Victoria Jubilee Townhall, or VJT Hall in Thiruvananthapuram is a well-known landmark in the heart of Kerala’s capital city. A popular venue for meetings and events, it was renamed Mahatma Ayyankali Hall in 2019 after the Dalit reformer, but it’s still better known by its 19th century moniker - or rather, its acronym.  

On a typically humid Wednesday evening in early October, people walk in through the gates in twos and threes and make their way inside the vast hall with high ceilings. A banner announces why they are streaming in – for a seminar titled “ISRO’s Future - Concerns and Anxieties” organised by the Indian Space Research Organisation (ISRO) Pensioners’ Association in Thiruvananthapuram. Sreekumari Amma, a retired engineer in the quality control division seated in the audience, says she came out of curiosity to hear what the speakers had to say, chiefly former chairman Dr G Madhavan Nair. Indeed, when Nair enters the hall, which has more or less filled by 5 pm, nearly everyone in the audience stands up deferentially. 

The association, which has some 4,000 members, is a fairly active body but the seminar on anxieties about ISRO’s future is still somewhat unusual considering the organisers and many of the attendees – pensioners – no longer have skin in the game. Association secretary Johnson S Fernandez acknowledges as much, both in his speech on stage and later, in conversation. “What happens to ISRO now will no longer affect us. But it would sadden us if the ISRO we took pride in is getting destroyed,” he says. 

“Destroyed” is a strong word. But 2026 has been an unusually challenging year for ISRO right from January, when the Polar Satellite Launch Vehicle (PSLV), failed for the second consecutive time, belying the rocket’s reputation as a workhorse. The next launch came an uncharacteristically long nine months later, raising questions about the delay. In July, the Department of Space took the unusual step of issuing restrictions on scientists working on critical missions who wanted to quit, following a stream of such resignations, estimated to be at least 100 in the last few months. 

All of this was happening at a time of unprecedented transformation in India’s space sector. With the Union government opening it up to the private sector in 2020, the number of space startups had boomed to over 400 from a single one in 2014, according to the government’s own estimates. While this was lauded in many quarters, it has also created concerns about the nature and direction of this expansion, including the role and limits of the Indian National Space Promotion and Authorisation Centre (IN-SPACe), set up by the government in 2020 to facilitate and regulate private sector participation. It also led to questions on the shrinking autonomy of the ISRO and the extent to which India should be relying on startups to expand its space programme.

The biggest cause for unease among employees and the trigger for that seminar itself were certain public statements by Pawan Goenka, who heads IN-SPACe. At a media event in August, Goenka said that eventually, ISRO would stop manufacturing launch vehicles, including the PSLVs – it would all be done by the private sector. Responding to his interlocutor’s question on when ISRO would take on a role similar to NASA (the US space agency National Aeronautics and Space Administration) and give a lot of its work to the private sector, Goenka said: “Eventually, ISRO will not manufacture any launch vehicles – it will all be done by the private sector or PSUs. They will not do day-in, day-out kind of satellites. They’ll do satellites for special purposes … and develop new technology, which will then get transferred to (the) private sector,” he had said. 

A furore ensued. Prominent figures like former ISRO chairman Madhavan Nair came out with statements critical of Goenka’s remarks, questioning whether the private sector would be able and willing to make the kind of investment needed for such operations. A couple of weeks later, nine ISRO staff associations jointly wrote to the ISRO chairman, seeking written clarification on what the role of the private sector would be, the terms surrounding the transfer of technology from ISRO to private companies and underlined that ISRO should not be reduced to “a residual R&D boutique.” Soon, Goenka had to walk back some of his comments, clarifying on X that ISRO “will remain the bedrock of (the) Indian space sector” and blaming the controversy on “some misleading narrative” in the media. 

But the damage had been done. Goenka’s comments brought to the fore the discomfort that had been simmering within India’s premier space agency about various changes that were under way, and has raised several questions around the six-decade-old space agency’s functioning and role in the future, after the domain was opened up to the private sector in 2020.

Against the odds

ISRO’s inception and journey has been one of audacity and ambition, punching far above of its weight for a newly-independent, developing country. While it was set up by the Indian government in the shadow of the space race between the USA and the USSR in 1969, its first chairman and founder, the legendary Dr Vikram Sarabhai, was clear about what ISRO’s place would be. India, he had said, would adopt a peaceful approach to space exploration and research – the idea was that it should “materially assist” the country to leap-frog from its conditions.  “In India, the immediate goals of our space research are modest. We do not expect to send a man to the moon or put elephants, white, pink or black, into orbit round the earth,” he famously said, in a public lecture on All India Radio in 1966. 

Since the launch of its first sounding rocket from Thumba, the small fishing village in Kerala in 1963 (when ISRO was INCOSPAR, the Indian National Committee for Space Research) which became the site for India’s first rocket launching station, ISRO has had several triumphs, against all odds.  As Nair remarked in his speech in Thiruvananthapuram, “We had to learn and build from scratch because no foreign country would tell us.” The country’s homegrown successes encompassed indigenous satellites and launch vehicles (like the PSLV) to its first lunar mission (Chandrayaan 1) and Mars Orbiter Mission, Mangalyaan, on a frugal budget of less than $75 million, to, more recently, Chandrayaan 3.

Then in June 2020, the Narendra Modi-led government announced reforms in the so far government-centric space sector to enable private companies to participate in all aspects, and commercialise space. It also set up IN-SPACe, which was to act as an autonomous, single-window agency under the Department of Space to both regulate and facilitate private sector activities. Pawan Goenka, who retired as managing director and CEO of auto major Mahindra & Mahindra, was brought in to head IN-SPACe. This was further concretised in 2023 through the Indian Space Policy, which sought to delineate activities, and stated that ISRO would focus on frontier research and development including deep space exploration and human spaceflight programmes, and gradually transition out of manufacturing operational space systems. Mature technologies would be transferred to the private sector for commercial production. To that extent, Goenka’s subsequently controversial statements were not completely off script, analysts point out. The following year, the government liberalised foreign investment in the space sector, allowing up to 74% FDI for satellite manufacture and operations, up to 49% for launch vehicles and spaceports and up to 100% for making space components and subsystems. 

India’s move to commercialise the space sector and promote industry takes place in the context of the shift globally. Space agencies in the US and Europe had embarked on this route as early as the ‘90s, subsequently accelerated by  technological advancements – Elon Musk’s SpaceX and Starlink being the biggest success stories in the private sector. Reuters reported that Starlink has deployed over 10,000 satellites and earned $11..4 billion in revenue in 2025 while SpaceX earned $4.1 billion from its space and launch business. At about $8 billion, India’s share of the global space economy is estimated to be only around 2%. “In 2013, there were hardly 1,000 active satellites. Last year, there were some 17,000. It became evident that there was a boom and India wanted to take advantage of the global scenario,” says Dr Ajey Lele, deputy director, Manohar Parrikar Institute for Defence Studies and Analyses. 

According to the government, there are over 400 startups in the space sector today, compared to one in 2014. The sector has also raised over $1.27 billion from venture capital (VC) and private equity (PE) funds, according to business intelligence platform Tracxn, with one startup, Skyroot Aerospace, achieving the coveted unicorn status of a valuation of over $1 billion. In July, Skyroot, incidentally founded by two former ISRO employees, successfully launched Vikram-1, India’s first privately developed orbital rocket to wide acclaim. 

Coincidentally, it was around the same time that the news of the exodus of over 100 scientists from ISRO in a relatively short span, and the government’s measures to try and stem it broke. More than the number of people who left over a few months, the more concerning fact was that this included people working on critical missions, as the government memorandum made evident – scientists and engineers associated with major programmes like Gaganyaan, it said, would have to get the decision cleared from the Department of Space if they wanted to resign or take voluntary retirement, as opposed to the existing policy of allowing centre directors to take the call. According to media reports, around 80 scientists left the UR Rao Satellite Centre in Bengaluru and around 20 left the Vikram Sarabhai Space Centre in Thiruvananthapuram. 

A senior scientist who recently left but did not want to be quoted said that while each may have their own reason for quitting, one factor was the boom in the private sector, which now offers more opportunities than at any time previously. Asked about his own plans, he said he has received multiple offers. “I’m evaluating options," he said.

“The private sector would be offering 3-5 times ISRO’s compensation. But they may not get the same challenging environment,” Madhavan Nair told TNM. However, while the most ambitious missions such as human space flights and an indigenous space station may continue to be under the purview of ISRO, under the new space policy, the private sector, too, now offers opportunities in making launch vehicles, satellites and other projects that were previously ISRO’s domain alone. To stem the tide, Nair suggests the government should try to improve employee morale rather than taking a restrictive approach and making resignations difficult. The number by itself is not alarming, he feels, pointing to a bigger exodus during the software boom of the early aughts, when engineers were leaving to join IT companies for generous pay packages. 

A bigger issue might be the number of vacancies ISRO has been grappling with since the beginning of the pandemic. A Parliamentary Standing Committee highlighted this in its report in March 2026, noting the Department of Space’s commitment to fill 2,383 posts by December 2026. Another analysis by ToI found that ISRO was faced with its biggest staffing shortage in 25 years, with three in every ten posts vacant. In its response to the Parliamentary committee, the Department of Space said the accumulation of vacancies was largely the result of cascading effects of the pandemic curbs, “the implementation of sectoral reforms, and the adoption of more stringent and foolproof recruitment procedures”.

A month after news of the resignations broke, another controversy followed in the form of Goenka’s comments that ISRO would gradually withdraw from manufacturing launch vehicles. Among the strongest responses was the letter from nine employee associations to ISRO’s chairman, Dr V Narayanan, dated September 4 questioning the contours that private participation in the space sector was starting to take. 

The primary concerns expressed in the letter centred around what ISRO’s role would be in future in the design, development and testing and launch of launch vehicles PSLV, LVM-3, SSLV (small satellite launch vehicle) and “successor vehicles”; the need to have in writing the manner in which technology, test facilities, launch complexes and know-how was being transferred or opened up to the private sector since these were all built up using public funds; what would happen to existing employees and future recruitment amid all these shifts; and sought a written clarification on whether the IN-SPACe chairman’s remarks represented the government of India’s decision or if it was part of the organisation’s promotional outlook. 

It also referred to Goenka’s statement that 120 technologies had been transferred to the private sector and pointed out that there was no corresponding official communication from the Department of Space on this. In his response to a question on ISRO giving a lot of its work to the private sector during his session at Business Today’s India @ 100 conclave on August 21, Goenka had also said that PSLV and LVM3 (earlier known as GSLV Mk III) rockets would also be transferred to the private sector and no PSUs would be allowed to participate in this contract. (The bid for the technology transfer for SSLVs, or small satellite launch vehicles, was won by Hindustan Aeronautics Ltd, a PSU). He also said that the operations of the new launch centre – coming up in Kulasekarapattinam in Tamil Nadu - would be given to the private sector. Some satellites ISRO is currently building would also be transferred to the private sector, he said. IN-SPACe has already invited expressions of interest for the technology transfer for both PSLV and LVM3 rockets earlier this year. 

The employee associations are not the first to raise concerns over the terms of technology transfer to private players. The Parliamentary Standing Committee’s Report stated that it had been observed that technologies are “often transferred to private players at undervalued rates, allowing these partners to earn significant profits while the originating institutes receive only a marginal share of the value created.” 

The limits of IN-SPACe’s role is also being questioned by employees and former ISRO heads like Nair. At the public seminar by ISRO pensioners, Nair said IN-SPACe was supposed to be a regulator, but instead it had started to act like a player. “This was a distortion,” he said. Nair, who had written to Prime Minister Narendra Modi after Goenka’s statements, also told TNM in an interview that ISRO was used to a unique style of functioning from the time of inception, whereby full autonomy was given, with the Space Commission delegating powers to various centres. “We didn’t have to wait for any order from Central Secretariat to run ISRO.” Over the years, the bureaucracy diluted this autonomous style of functioning which, he said, had impacted ISRO’s working culture.  “There is some sort of uncertainty and a fear complex as a result of this increased autonomy,” he says.

The charge that ISRO’s autonomy was shrinking had come up previously, over a delay in the launch of GSLV-F17 which took place in September – allegedly a decision that was not taken by ISRO, according to Nair and others who requested anonymity. MC Dathan, former director of the Vikram Sarabhai Space Centre (VSSC), said that launches getting delayed would also have a demoralising impact on the employees working on these missions. “Earlier, once we decided on the date of a launch, that would be it. Allowing bureaucrats in Delhi to take this decision really affects the morale of youngsters,” he said. 

Two days after the representation by the employee associations, the ISRO chairman addressed employees via video conference. However, instead of responding directly to the specific concerns raised in the letter, Narayanan spoke more generally, about ISRO’s upcoming missions and its past achievements, and allaying any question of privatisation. The written clarifications they sought were also not forthcoming. Disappointed with this response, the Joint Action Council representing the nine employee associations wrote to the chairman again on October 7, this time seeking a meeting to discuss the issues they raised. “The core questions regarding the future mandated role of ISRO, the policy on privatisation/transfer of manufacturing and operational functions, technology transfer, staffing and recruitment and employee safeguards remain substantially unanswered,” the letter stated, reiterating that the public statements by the head of IN-SPACe had created widespread anxiety among employees and their families. 

ISRO did not respond to multiple questions emailed by TNM.

Analyst Dr Lele says the proposed changes would have some impact on employees in terms of structure and retraining. But he adds that ISRO also has a lot on its plate, with two moon missions lined up, a next generation launch vehicle (NGLV) and more. “Employees may not get to do what they were doing for the last 15 years. But there is still a lot to do, so they need not be unduly worried,” he says. Layoffs, for instance, would be unlikely considering ISRO personnel represent trained manpower. “ISRO needs its employees more than vice-versa.” Rather, with the manufacture of PSLVs and other launch vehicles slated to move to the private sector, companies would turn to ISRO for trained talent. “Develpers, too, would naturally be attracted to the agency that’s actually going to implement it on the ground,” he says. 

However, Dr Lele is more circumspect about the extent to which India should be relying on startups to expand its space programme even as the government is looking to grow the country’s space economy from $8.4 billion to $40-45 billion by 2040. Another estimate by investment banking firm Jefferies pegs the growth at $100 billion by 2040 on the back of the sector’s liberalisation, funding and private sector players. “Startups will bring a lot of innovation, a lot of business but you have to understand the private sector should be part of the system, and not the entire system, which seems to be what has happened with SpaceX. One should not be unduly dependent on the private sector,” he says. When it comes to strategic issues, too, startups should be kept at arm’s length, he suggests, again pointing to SpaceX and Starlink founder Elon Musk’s growing global clout in global strategic affairs. “India should have its own strategic programme.”

As India eyes a bigger slice of the global space economy, balancing multiple stakeholder interests, including those of its storied premier space agency and the employees who built it, may be a challenge that’s not easily resolved. 

Indulekha Aravind is an independent journalist based in Bengaluru.

This report was first published by The News Minute. Become a joint subscriber here.