ISRO will transform in 2021 as India pumps big money to draw in startups for the 'second space age'

ISRO will transform in 2021 as India pumps big money to draw in startups for the 'second space age'
Indian Space Research Organisation (ISRO) did not see a dip in its budget despite it being a COVID yearBCCL
  • The Indian Space Research Organisation (ISRO) is turning into a facilitator as it looks for the private sector to play a bigger role in space technology in the ‘second space age’.
  • Despite the COVID-19 cash crunch, the Budget 2021-22 has not deprioritised the space sector with a 3.48% increase in expenditure allocation.
  • Money earmarked for New Space India Limited — the Indian Space Research Organisation’s commercial arm — saw its budget increase 138 times.
  • According to space policy expert Chaitanya Giri, the government is looking to monetise ISRO's intellectual property and bring in fresh revenue.
The Indian Space Research Organisation (ISRO) is on the road to transforming itself from an end-to-service provider for India’s space programme into a facilitator. The latest budget allocation is a signal that the Indian government is serious about giving private players a serious role In the ‘second space age’.

Despite the cash crunch caused by the COVID-19 pandemic, India did not cut back on the money for the space programme. In fact, the outlay increased by 3.5%. More importantly, bulk of the funds will be routed to a new entity, New Space India Limited (NSIL).

ISRO will transform in 2021 as India pumps big money to draw in startups for the 'second space age'
Budget 2021-22 allocation for the Department of SpaceBI India

NSIL, the commercial arm ISRO saw a 138 times jump in allocation. The money that earlier went from the Department of Space (DoS) to ISRO, will now be routed to NSIL, which will then authorise the participation of private players.

YearNSIL expenditure budget
2019-20₹10 crore
2021-22₹700 crore

“That means that the government is super serious about commercialising whatever IP (intellectual property) it has under its kitty and just monetising that. It’s a departure from the mindset of yesteryears where ISRO was only there to cater to the government’s requirements,” Chaitanya Giri, space policy expert and fellow with think tank Gateway House, told Business Insider.


Doubling down on space sector reforms
The push for private sector participation in the space sector is a strategic necessity, according to Giri. “For our commercial sector to get started on this front, it will need governmental space agency ISRO to get things done at its end first,” he points out.

India’s edge in the global market was its ability to keep things cheap. An advantage that has now been diluted by the emergence of companies like Elon Musk’s SpaceX who have made launching satellites more competitive.

Its Crew Dragon capsule is another indication that the second space age will be run by the commercial sector. “They will be building the rockets, launch services, building space capsules and providing logistics,” explained Giri.

NSIL is set up, but what comes next?
Last year, in May, Finance Minister Nirmala Sitharaman announced major reforms for the space sector as a part of the Atma Nirbhar package — including the setting up of the Indian National Space Promotion and Authorisation Centre (IN–SPACe).

“In-SPACe was supposed to be formed by the end of last year — by December 2020 — so it’s getting slightly extended. But, I’m pretty sure that it will be completely established within the next two months,” Pawan Kumar Chandana, co-founder of Skyroot Aerospace told Business Insider in a pre-budget interaction.


According to Giri, the Indian Space Research Organisation (ISRO) has always built its own rockets and satellites. But, that will no longer be the case. “They want to include all of these small startups that have emerged and start giving them contracts according to their niche,” said Giri.

In-SPACe opens up ISRO’s treasure trove of satellite data to private players and will allow start ups to use the apex space agency’s testing facilities to develop their own technologies. The challenge lies in setting the price points for this use.

“Like always, when it comes to finance, every rupee counts when it comes to the government… And, the government's mandate is to encourage the private sector, so they cannot charge it as high as they may want to,” Chandana explained.

DataLabs by Inc42 shows that there are around 120 active startups working in the space sector right now. Most of them emerged in or after 2014.

Moreover, the Economic Survey 2020-21 pointed out that only around 40 startups are already working with the government. "This number is likely to increase in coming years with technology to play a big role,” it added optimistically.

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