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April 8, 2025 – India’s space agency ISRO is preparing to exit the business of building rockets. Under a sweeping policy shift, the Indian Space Research Organisation will hand over the manufacturing of its proven launch vehicles to private companies and public-sector undertakings, while focusing solely on advanced research, deep-space missions, and next-generation technology development.
The move, confirmed by Pawan Goenka, chairman of the Indian National Space Promotion and Authorisation Centre (IN-SPACe), is part of a broader push to grow India’s commercial space sector—currently valued at around $9 billion—and to create a self-sustaining private ecosystem that can compete globally.
Instead of building rockets in-house, ISRO will increasingly act as a research and development organization. The agency will continue to design new systems, work on advanced propulsion, human spaceflight, and planetary exploration, but once a technology reaches maturity, the production rights will be transferred to industry.
This mirrors the model seen in the U.S., where NASA contracts with companies like SpaceX and Blue Origin for launch services, freeing its own workforce for deep-space exploration. India’s approach, however, keeps the technology transfer inside the country, strengthening domestic supply chains.
The first casualty of the production shift is the Small Satellite Launch Vehicle (SSLV). Following a competitive bidding process, the technology and manufacturing rights have been transferred to Hindustan Aeronautics Limited (HAL). The SSLV is now the first Indian rocket to be built entirely outside ISRO’s facilities.
This transition allows ISRO engineers to move away from repetitive production work and focus on innovations such as reusable launch systems, green propulsion, and interplanetary probes.
The Polar Satellite Launch Vehicle (PSLV)—India’s most reliable workhorse, with over 50 successful launches—is expected to be the next major rocket to move to private hands. The government is working on a competitive bidding process, inviting private firms to bid for production rights.
Following that, the Launch Vehicle Mark-3 (LVM3), India’s heaviest operational rocket, which carried the Chandrayaan-2 and Chandrayaan-3 missions, will also be handed over to industry. The transition of LVM3 is seen as a bigger test, given its complexity and the high reliability standards required for crewed and deep-space missions.
The shift is not a simple privatization of ISRO’s work. It’s a strategic division of responsibilities. ISRO will continue to handle high-risk, experimental, and strategically sensitive projects—such as the Gaganyaan human spaceflight program, lunar and Mars sample return missions, and next-generation reusable launch vehicles.
Private companies, in turn, will handle the manufacturing of operational rockets, satellite production, and commercial launch services. This separation is expected to allow India’s space program to scale up faster without requiring ISRO to multiply its own workforce.
India’s private space ecosystem has grown rapidly since the sector was opened in 2020. Startups like Skyroot Aerospace and Agnikul Cosmos have already tested suborbital and orbital technologies. Skyroot’s Vikram rocket and Agnikul’s Agnibaan are expected to offer commercial services soon.
However, moving PSLV and LVM3 production to private hands will require significant investment in manufacturing facilities, quality assurance, and supply chain readiness. IN-SPACe has indicated that the transition will be gradual, with ISRO supporting industry through technology transfer, testing infrastructure access, and shared expertise.
The success of the entire strategy hinges on how well technology is transferred. Private companies cannot simply copy blueprints; they need hands-on training, access to test facilities, and help in recreating ISRO’s proven quality and safety culture.
ISRO has already started training industry engineers on rocket assembly, avionics, and propulsion testing. The space agency will also continue to operate its own launch range and mission control, ensuring safety and reliability for all launches.
Beyond rocket production, the policy could create a cascade of new business opportunities. Engine manufacturers, composite material suppliers, electronics firms, and testing labs will all need to scale up. Estimates suggest that a fully commercialized launch industry could generate thousands of high-skilled jobs and attract new foreign investment.
India’s space economy, currently $9 billion, is targeted to grow to $40–100 billion by 2040, and private participation is seen as essential to reaching that goal.
With the manufacturing burden lifted, ISRO can concentrate on what it does best: pushing frontiers. The agency is planning a Venus orbiter, a Mars lander, a lunar sample return mission, and a space station by 2035. The shift in manufacturing responsibilities will free up both budget and manpower for these ambitious projects.
Industry experts caution that the transition will take years. PSLV and LVM3 are complex systems with thousands of components and years of flight heritage. Private companies will need to demonstrate they can maintain the same reliability standards before taking over full production.
Goenka confirmed that the government will use a phased approach, starting with subsystem manufacturing and gradually moving to complete vehicle assembly. The SSLV handover serves as a learning case for the larger rockets.
India’s move to commercialize rocket production could lower launch costs further, especially for small satellites. Currently, ISRO’s PSLV launches are already among the cheapest in the world. With private industry competing, prices could drop even more, making India a more attractive destination for international customers.
The policy also sends a strong signal to global investors: India is serious about building a private space industry that can compete with SpaceX, Rocket Lab, and others.
ISRO’s decision to stop building rockets is a historic shift. It marks the end of an era where the agency built everything from scratch, and the beginning of a new phase where India’s space program is powered by a mix of government research and private industry muscle. If executed well, it could transform India into a space-faring power with a world-class commercial launch sector
