Former ISRO chairman G Madhavan Nair has questioned the viability of the Union government’s move to have private companies and public sector undertakings (PSUs) take over the manufacture of launch vehicles, arguing that industry already handles much of the manufacturing for ISRO, while the space agency continues to carry out critical operations such as final assembly, integration, testing, and launching.
Madhavan Nair’s comments come after Indian National Space Promotion and Authorisation Centre (IN-SPACe) Chairman Pawan Goenka said ISRO would stop manufacturing launch vehicles, with their production to be taken up by the private sector or PSUs.
“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,” Goenka said while speaking at Business Today’s India @ 100 Economy Summit.
According to Madhavan Nair, industry has already been involved in the manufacture of launch vehicles for decades, and “around 90% of the work” on rockets such as the Polar Satellite Launch Vehicle (PSLV) and Geosynchronous Satellite Launch Vehicle (GSLV) is currently done by industry.
“The final assembly, integration, testing, and launching is done by ISRO. So that's the critical operation, and we cannot leave it to an industry who is not experienced or who does not have the expertise in the field,” he said.
Madhavan Nair questioned whether private companies would be willing to make the investment required to independently undertake such operations. “If you want to create an establishment similar to ISRO, today it will cost something like 50,000 crores. And the income from that will be hardly a few thousand crores,” he said.
“So which industry will come forward in making such a large investment with a very miniscule return? So that's a big question mark,” he added.
According to Madhavan Nair, the more lucrative opportunities in the space sector lie in applications based on space technology rather than the manufacture of launch vehicles and satellites.
“The contribution of the global business in space is only 20% from the hardware industry, whereas 80% is coming from the application program,” he said, pointing to services based on communication satellites and earth observation as examples.
ISRO's shift to industry
The proposed shift is part of the Union government’s broader effort to increase private-sector participation in the space sector, with ISRO expected to increasingly focus on research, scientific missions, and advanced technologies rather than routine production.
Speculation over the move had intensified after IN-SPACe recently invited Indian companies to operate and maintain ISRO's upcoming Rs 1,000-crore Small Satellite Launch Complex (SLC) in Kulasekarapattinam in Tamil Nadu's Thoothukudi district.
According to India Today, the first major step has already been taken with the Small Satellite Launch Vehicle (SSLV). Its technology and production rights have been transferred to Hindustan Aeronautics Limited (HAL) following a bidding process. The government is now looking at similar arrangements for the PSLV and Launch Vehicle Mark-3 (LVM3), India’s most powerful operational rocket.
Madhavan Nair said attempts to transfer the production of launch vehicles to industry have been underway for years. “After the launch of PSLV, we announced that we want the industry to take on this. Even today that is not fructified,” he said.
He said the latest arrangement involves NewSpace India Limited (NSIL), the commercial arm of ISRO, working with Larsen & Toubro and HAL to produce the PSLV, while critical technology continues to be held by ISRO. “After nearly 20 years of effort, there is a stage which we have reached here now,” he added.
ISRO has historically developed technologies, manufactured rockets and satellites, and conducted launches, while also pursuing scientific research. However, industry has long been involved in manufacturing components and hardware for ISRO missions.
“We have already transferred 120 technologies from ISRO to the private sector,” Goenka said.
The proposed shift would see private companies and PSUs take on a larger share of routine manufacturing and established technologies, while ISRO focuses more on research, advanced technologies, and complex scientific missions.
According to the report, the government is also planning to hand over the operations of a new launch centre to private industry. Goenka said the operator could be finalised within the next four or five months.
What are PSLV, GSLV, LVM3 and SSLV?
The PSLV is ISRO’s workhorse rocket and has been used since the 1990s to launch satellites for earth observation, navigation, scientific research, and other applications. It is a four-stage launch vehicle capable of placing satellites into different orbits and has also launched satellites for several other countries.
The GSLV is a heavier launch vehicle designed primarily to place communication and other satellites into geosynchronous transfer orbit. Its more powerful successor, the Launch Vehicle Mark-3 (LVM3), is currently India’s most powerful operational rocket. LVM3 has been used for major missions including Chandrayaan-3 and has also been selected as the launch vehicle for India’s Gaganyaan human spaceflight programme.
The Small Satellite Launch Vehicle (SSLV), meanwhile, was developed for launching smaller satellites, particularly into low Earth orbit. It is designed to provide a quicker and more flexible launch option for small satellites and can carry payloads of up to 500 kg.
The transfer of launch vehicle production is part of the Union government’s broader push to expand the role of non-government entities in the space sector. Under the proposed model, established technologies and routine manufacturing would increasingly be handled by industry, while ISRO would focus on developing new technologies, scientific missions, and more complex capabilities.