8.07.2025
From rethinking the role of public sector players to challenging investor priorities, S. Somanath outlines what India must do next to become a truly competitive space economy
India’s space ambitions are accelerating. With 100 per cent FDI now permitted, major tech transfers underway, and legacy players like HAL entering launch vehicle production, the country is opening its skies to private enterprise like never before.
The former ISRO Chairman, Vikaram Sarabhai Professor, S. Somanath however, wants the focus to shift more sharply toward the downstream, where long-term value is created and space applications can deliver real-world impact.
He warns that many space startups remain stuck in the prototype stage, and that real success will depend on building scalable businesses that solve market needs.
From rethinking the role of public sector players to challenging investor priorities, Somanath outlines what India must do next to become a truly competitive space economy.
What are some of the significant gaps in India’s space value chain today?
The downstream. Everyone is chasing upstream, rockets, satellites, launches. But 60 per cent of the real revenue lies downstream in applications, equipment, data services. Unless we grow the downstream ecosystem, the upstream cannot be sustainable. Investors should look more seriously at downstream startups and products that solve real societal problems.
You’ve said earlier that ISRO should move from being a “doer” to an “enabler.” What does that transformation look like today?
For decades, ISRO had to do everything, build rockets, satellites, systems, because no one else was equipped. But that’s changed. Capabilities have spread, private companies are ready, and there’s now a business case. ISRO must focus on what it does best, cutting-edge R&D, and hand over operational roles to capable private players.
How do you see the startup ecosystem evolving in the Indian space sector?
Startups are great at incubating ideas, but they’re not built for full-scale production or long-term business from the outset. The real goal is for them to evolve into mature enterprises, solving real problems, building reliable products, and monetising them.
We still have startups, but very few have scaled into sustainable, profit-making space companies.
Unlike sectors like FinTech, where the path from startup to enterprise is relatively quick due to lower investment and faster feedback loops, space is capital-intensive, has long gestation periods, and offers slower returns. This naturally deters many from entering or staying in the sector. Failure is also more complex here, it can happen not just in the market, but at the product level itself.
While HAL’s entry into space through SSLV is a positive move, it can’t do everything on its own. An ideal model would be for HAL to act as an integrator and aggregator, supported by a strong supply chain of private vendors.
That said, my preference is to see private companies independently leading these efforts. For instance, Indian telecom companies could build and operate their own satellite constellations. That’s the kind of private-sector ambition we need to truly scale the space ecosystem.
Wouldn’t that risk creating monopolies, with a few large players dominating space services?
A: That concern always comes up when someone begins to scale. But monopoly isn’t inherently bad, it often stems from the strength of a product, its reliability, and market fit. That’s exactly how SpaceX gained dominance.
Monopoly is a natural phase in any technological or product evolution. What matters is not a monopolistic mindset, but recognising that leadership in innovation can bring temporary monopolies.
The real solution isn’t to resist monopoly, but to foster more innovation so new players can emerge and challenge incumbents, just as the Sony Walkman once dominated until others disrupted it.
While India has allowed for foreign investment, does that pose any security or IP risks?
Not really. FDI is regulated. IP is protected. In upstream sectors, there are caps and controls. In downstream, 100 per cent FDI is allowed, and rightly so. It’s about attracting capital, not giving away knowledge.
Quelle:businessline