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Companies that were primarily vendors to Isro have started warming up to the idea of investing in technology and making bigger bets in the space sector, especially after the success of the Chandrayaan-3 mission
August 23, 2023, India: There was no cricket match involving the Indian team that day. No new southern blockbuster had been released in theatres, nor was there a lockdown or curfew. Yet an hour before India’s mission to the moon, Chandrayaan-3, was to land on the lunar surface, people across the country either sat quietly glued to television screens or watched the event unfold on their smartphones. It broke all records on YouTube with 8 million concurrent views on the Indian Space Research Organisation’s (Isro) channel. The Vikram lander successfully touched down near the moon’s South Pole at 18:03 IST, and the nation erupted in joy.
Not only had India become the fourth in the world to make a soft landing on the lunar surface, it also became the first to successfully land near its South Pole. But beyond the euphoria, the event also signalled the triumph of more than 400 private companies that are part of the vendor ecosystem that Isro has nurtured since its founding in 1969 to service its components, materials, and fabrication requirements.
Larger companies, which were primarily vendors to Isro, have now started warming up to the idea of investing in technology and making bigger bets. So many want to have access to making rockets
Pawan Goenka
Chairman
IN-SPACE
Indeed, each successful step that Isro has taken has turned into a giant leap for these firms. And over the years, Isro’s ecosystem has included a diverse set of firms: From public sector undertakings to the legacy names of India Inc. and fledgeling spacetech start-ups. These firms have gained invaluable experience with each mission, and that in turn has bolstered their confidence to the extent that some are now looking to strike out on their own. In this changed scenario, marked by the watershed of Chandrayaan-3, there is a growing recognition of Indian firms’ prowess and promise, reflected in the easier availability of funds. Another indicator of this change is the sudden spurt in the number of spacetech start-ups to more than 150 entities, which is the highest in Asia. These firms are spread across the gamut of space activities, from launch services to small satellite constellations to space tourism. And they are vying for a share in the $386-billion global private space industry, which is expected to grow to $1 trillion by 2040.
“While the Chandrayaan series has been led by Isro, there has been significant participation by the private sector in supplying components. It goes to the agency’s credit that it identified suppliers who have over time developed capabilities to support a high-end mission like the Chandrayaan series,” Lt Gen. (Retd) Anil Kumar Bhatt, Director General of the apex industry body the Indian Space Association (ISpA), tells Business Today.
The list includes notable public sector enterprises such as Bharat Electronics Ltd, Bharat Heavy Electricals Ltd, Electronics Corp. of India Ltd, Hindustan Aeronautics Ltd, Kerala State Electronics Development Corp. Ltd, and Mishra Dhatu Nigam Ltd. It also has storied names from the private sector like Tata Consulting Engineers (TCE)—part of the N. Chandrasekaran-led Tata group—whose relationship with Isro dates to 1971, when it engineered the first solid propellant plant. Today, the TCE-designed mobile launch pedestal at the Satish Dhawan Space Centre is used for assembling satellite launch vehicles.
“Private sector participation plays a crucial role in India’s success in the space sector. It brings in much-needed innovation for developing space-based applications and services while also opening a new pool of resources and talent,” says Amit Sharma, MD and CEO of Tata Consulting Engineers.
Likewise, Jamshyd Godrej-led Godrej & Boyce has been an Isro partner for over 30 years, contributing to the production of over 175 engines for the agency’s workhorse Polar Satellite Launch Vehicle (PSLV) and Geosynchronous Satellite Launch Vehicle (GSLV) missions through its subsidiary, Godrej Aerospace. “We have been partnering with Isro’s space missions, including all PSLV and GSLV missions, and have contributed critical components like liquid propulsion engines, satellite thrusters, and control module components for both the Chandrayaan and Mangalyaan missions,” says Maneck Behramkamdin, Senior VP & Business Head at Godrej Aerospace.
We are living in the best of times. From a child to a researcher, everyone wants to go to space. But...there’s also a lot of other learnings in the process.That’s the reason you also have so many start-ups coming up
Srimathy Kesan
Founder and CEO
Space Kidz India
Engineering-to-IT conglomerate Larsen & Toubro, led by S.N. Subrahmanyan, is another storied partner. The critical aerodynamic test facilities it developed in 1975 are not only among India’s first but have few precedents worldwide. “L&T has played a critical role in the launch of the Launch Vehicle Mark-3-M4 (LVM3-M4) [in the] Chandrayaan and Aditya L1 missions. L&T is involved in these missions, starting from the manufacturing of flight hardware to mission tracking,” states Arun Ramchandani, Executive Vice President and Head of Defence Business at L&T.
Then there are component suppliers like Pune-based Walchandnagar Industries, which has devoted a significant part of its resources towards servicing space services in the five decades of its association with Isro. Chirag Doshi, Managing Director & CEO, says, “Since our division’s humble beginnings in the early 1970s, we boast of 40 per cent of our resources, both men and machines, exclusively working towards India’s space programme.”
A second wave of private sector partnerships has been forged with the expansion of Isro’s space programme since the 1990s, with new suppliers like Ananth Technologies Ltd (ATL), Alpha Design Technologies Ltd (ADTL), Astra Microwave Products, Centum Electronics, Grintex India, and MISSAR Systems. Hyderabad-based ATL has been engaged in the production of diverse electronic and mechanical sub-systems for Isro’s launch vehicles, satellites, spacecraft payloads, and ground systems. Referring to the recent successful launch of the Aditya L1 mission, Subba Rao Pavuluri, ATL Founder, Chairman and Managing Director, observes, “This partnership represents a significant milestone for us, as we contribute our technical excellence and manufacturing to support India’s space exploration endeavours.”
In 2016, ADTL became the first Indian company to secure a contract for Assembly Integration and Testing (AIT) for the Indian Regional Navigation Satellite programme. “The same year, Isro also awarded us the contract for the revival of the tele-education network in the Northeastern states by upgrading seven Ku-band hubs and about 325 Very Small Aperture Terminal (VSAT)-based classrooms,” mentions Sujatha Deepak, General Manager-Systems at ADTL. Ku-band satellites are the most popular for all forms of communications while VSAT is a small-sized earth station for receiving or transmitting data.
Private sector participation... brings in much-needed innovation for developing spacebased applications and services while also opening a new pool of resources and talent
Amit Sharma
Managing Director & CEO
Tata Consulting Engineers
But as Space Race 2.0 picks up pace, the companies are no longer seen just as vendors. The government would like them to play a larger role in building a robust spacetech ecosystem. This change in thinking has been prompted by the transformation of the global space industry. Four major trends, including the mass adoption of commercial satellite services mainly for providing internet access, commercial space stations, in-space resource extraction and exploitation, and weaponisation of space, especially, indicate pivotal ‘strategic turning points’ for the space sector, according to a report by the advisory Arthur D. Little. Experience gained from space activities can help the private sector increase the role of technology in other areas and boost the pace of the Indian space sector, bringing it in line with mature space agencies like US space agency Nasa, says TCE’s Singh. “Private sector involvement not only brings strong project management and planning skills to the project but also technical design and engineering skills,” he adds.
Following the successful liftoff of India’s first privately built Vikram-S rocket last November, the ambitions of several spacetech start-ups have also soared. With the rocket serving as the best metaphor for space exploration, these companies that are developing everything from launch vehicles to satellites to space applications see Kondapur (Telangana)-based Skyroot Aerospace’s achievement as putting their sector on a high growth trajectory. “India has a space ecosystem built over six decades, with a very established domestic supply chain and cutting-edge infrastructure such as test facilities and launch pads. It also has the best cost efficiency for building space systems in the world. Also, India’s new space policy is very robust and efficient, in addition to more venture capital flowing into the sector from last year,” asserts Pawan Kumar Chandana, Co-founder and CEO of Skyroot Aerospace.
Consequently, three new industry bodies—the Indian National Space Promotion and Authorisation Centre (IN-SPACe), the ISpA, and NewSpace India Ltd. (NSIL)—have been created to realign space activities from a supply to demand-driven model. “The opening up of the space sector to private players and start-ups is a significant step towards augmenting the competitiveness of the Indian space programme by encouraging them to develop end-to-end space capabilities while also allowing Isro to focus on research and development of advanced space technologies, space exploration, and non-commercial missions,” says Godrej Aerospace’s Behramkamdin. Isro will, therefore, be focussing more on capacity building and the sharing of its facilities for commercial launches through NSIL and with non-government private entities through IN-SPACe.
Designing and producing critical systems locally will not only achieve selfreliance in strategic sectors like space but also provide huge employment and a significant multiplier to the domestic economy
Arun Ramchandani
Executive VP & Head of Defence Business
L&T
“Earlier, private players collaborating with Isro or other government agencies were required to follow very stringent norms, such as keeping data secret or not sharing participation details. However, they are now allowed to talk about it, which has given confidence to smaller players,” says Brajesh Singh, Associate Director at Arthur D. Little. This has been followed up with the rollout of enabling frameworks like the Indian Space Policy, 2023, which delineates the roles of government organisations and provides clarity to private participants. Besides, the GST exemption on satellites put into space using locally made rockets launched from India and permitting up to 100 per cent FDI under the government route for firms involved in satellite establishment and operations have been announced. “The emergence of firms like SpaceX and One Web has made the government understand that [this] sector cannot move ahead without private players,” adds Singh.
Moreover, Chandrayaan-3’s success and Aditya L1’s progress have further enthused stakeholders. ATL is already looking to foray into small satellite constellations for mapping and geostationary satellites for communications. Chennai-based start-up Space Kidz India is developing a low-cost satellite bus called Space Rickshaw. “As the main structural component of a satellite, the Space Rickshaw will have the capacity to carry multiple payloads to the moon. To be launched by an Isro rocket, anyone doing research on the moon will be able to send their payloads through it,” says Srimathy Kesan, Founder and CEO.
Isro is nurturing firms in other ways, too. Of the 417 patents it has filed in space technology, 19 have been transferred to the industry.
The opening up of the space sector to private players and start-ups is a significant step towards augmenting the competitiveness of the Indian space programme
Maneck Behramkamdin
Senior VP & Business Head
Godrej Aerospace
Stakeholders see this as an opportune time for Indian companies to progress from making in India to making for the world. This has been part of the government’s strategy to open the sector to private sector participation since 2020. “Larger companies, which were primarily vendors to Isro, have now started warming up to the idea of investing in technology and making bigger bets in the space sector. So many of them now want to have access to making rockets, satellites, and other big projects,” Pawan Goenka, Chairman of IN-SPACe, tells BT. Following a recent IN-SPACe initiative, 23 companies expressed interest in manufacturing the Small Satellite Launch Vehicle (SSLV) developed by Isro to support the launch of satellite constellations into the Lower Earth Orbit (LEO) at affordable costs.
“Designing and producing critical systems locally will not only achieve self-reliance in strategic sectors like space but also provide huge employment and a significant multiplier to the domestic economy as work will flow down from the product OEMs to lower tiers of production,” says L&T’s Ramchandani.
Sreeram Ananthasayanam, Partner Consulting at Deloitte India, sees two cohorts of companies emerging: firms involved in upstream and downstream activities. The first will follow the Isro growth story to metamorphose into focusing on end-to-end capabilities or in segments like launch services and satellite or payload providers. “They have all the opportunity to evolve into mini-Isros.” But it is in the downstream segment that he sees far bigger potential. “Given India’s demographic dividend and its strengths in computers, advanced algorithms, and geospatial technologies, we see [it] taking a pole position in this segment.” Upstream activities involve satellite manufacturing, and launch services, while downstream activities encompass using satellite data for applications such as earth observation, communication, and navigation.
India’s tryst with space is not without its share of challenges. Compared with the Top 2 spacefaring powers, the US and China, the country stands at No. 7 in terms of satellites operated. It continues to depend on the West for imports of critical components for launch vehicles, spacecraft, and satellites. Furthermore, it has virtually no presence in activities such as space manufacturing, human space transport, space tourism, and high-altitude platforms and balloons. This should not come as a surprise, as the country’s space budget is merely 0.05 per cent of its GDP. In comparison, the US spends 0.25 per cent of its GDP on space.
Per a study by Arthur D. Little, the country’s space industry is expected to grow to $40 billion by 2040, at a CAGR of 9.2 per cent, to reach a 4 per cent market share globally. But it says India can do better and touch $100 billion by that year to corner 10 per cent market share.
Since our division’s humble beginnings in the early 1970s, we boast of 40 per cent of our resources, both men and machines, exclusively working [on] India’s space programme
Chirag Doshi
Managing Director & CEO
Walchandnagar Industries
Besides, the ongoing realignment in geopolitics has resulted in India being perceived as a counter to China. A surprise agreement inked during Prime Minister Narendra Modi’s state visit to the US was India becoming the 27th signatory to the Artemis Accords, a multilateral agreement between the US and other countries to return humans to the moon by 2025. More recently, ahead of the G20 Summit in New Delhi, the US reiterated its commitment to send the first Indian astronaut to the International Space Station later this year.
“As a global space community, we have been trying to formulate some shared perspectives on space exploration, how it should be accomplished, and who should benefit. The Artemis Accords were one of the first recent efforts to advance [those] original principles laid out almost 50 years ago,” Elizebeth Varghese, People in Space-Leader at Deloitte and author of Stellar Singularity: Navigating the Spacefaring Economy, tells BT.
Neha Singh, Chairperson and MD of data services provider Tracxn, feels this expanding India-US partnership will especially give a fillip to start-up funding. The ecosystem received $112 million in 2022, which is 17 per cent higher than in 2021, according to Tracxn.
So, how soon can India expect to see its own Elon Musk and SpaceX? Arthur D. Little’s Singh feels India still has a lot of ground to cover in terms of developing its R&D base and facilitating options for raising easy financing. “At the same time, we must not forget that Musk has taken years to reach where he is today. And that wouldn’t have happened without policy support from the US government. In the last couple of years, India’s space programme has moved into the next orbit. Provided this continues, we have the potential to produce our own versions of Musk and SpaceX,” suggests Singh.
Meanwhile, Deloitte’s Ananthasayanam has high expectations from spacetech start-ups. “It’s just a matter of finding the right sponsor or person with the right financial muscle to back them up...Some of these start-ups are working in areas such as Space Situational Awareness (SSA), green and electric propulsion and laser-based communications that only a very few companies are into, globally.” SSA is the knowledge of the space environment, including the location, orbit, and function of man-made objects as well as natural objects such as asteroids and comets.
If things remain on track, a thousand SpaceXs could bloom in India.
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