India Expands Space Economy with New Rocket Development Plans

India’s space sector is on the brink of significant transformation, as ISRO Chairman V. Narayanan recently announced a strategic partnership aimed at enhancing the country’s rocket development capabilities. During the India Manufacturing Show on November 6, 2025, Narayanan revealed that fifty percent of the development work for the Polar Satellite Launch Vehicle (PSLV) will be allocated to an industry consortium led by Hindustan Aeronautics Limited (HAL) and Larsen & Toubro (L&T). This move underscores the growing role of Indian industries in the space sector, which already supply 80-85 percent of the systems for ISRO missions.

The consortium’s first PSLV rocket is scheduled for launch by the end of the financial year in February 2026. Should two launches prove successful, future developments will increasingly shift to private industry, marking a significant change in the landscape of India’s space program.

Projected Growth of India’s Space Economy

India’s space economy is valued at approximately $8.4 billion in 2025 and is projected to reach $13 billion soon, with aspirations for a remarkable $44 billion within the next decade. This growth is fueled by the government’s commitment to involving private companies in satellite manufacturing and launch services. ISRO has already transferred technology for the Small Satellite Launch Vehicle (SSLV) to HAL under a deal worth Rs 511 crore, paving the way for the production of 16 SSLVs in the private sector.

India’s rockets, predominantly developed by ISRO, are designed to deploy satellites in various orbits, including Low Earth Orbit (LEO), Sun Synchronous Orbit (SSO), and Geosynchronous Transfer Orbit (GTO). Currently, the country operates three active launch vehicles: the PSLV, Geosynchronous Satellite Launch Vehicle (GSLV), and Launch Vehicle Mark-3 (LVM3).

Understanding India’s Rocket Fleet

The PSLV, often regarded as ISRO’s “workhorse,” is a four-stage rocket that utilizes solid fuel in its first and third stages, while employing liquid fuel in the second and fourth stages. It boasts a payload capacity of up to 1,750 kg to a 600 km sun-synchronous polar orbit. Variants of the PSLV, such as PSLV-XL, QL, and DL, are equipped with different numbers of strap-on boosters, enhancing their thrust capabilities. The PSLV has successfully completed numerous missions, including Chandrayaan-1 in 2008 and the Mars Orbiter Mission in 2013.

The GSLV, designed specifically for placing communication satellites into geostationary orbit, features a third stage powered by an indigenous cryogenic upper stage (CUS). The GSLV Mk II can handle 2-ton class satellites to GTO. Meanwhile, the LVM3 is India’s most powerful rocket, with the capacity to lift 4-ton class satellites to GTO or up to 10 tons to LEO, having been employed in high-profile missions such as Chandrayaan-2 and Gaganyaan.

The SSLV is tailored for “launch on demand” capabilities for smaller satellites weighing up to 500 kg, featuring three solid stages and a liquid velocity trimming module. Furthermore, plans for a Next Generation Launch Vehicle (NGLV) are in place, with an expected launch around 2034-35, capable of transporting up to 16 tons to GTO.

The Economic Impact of the Rocket Industry

India’s rocket industry is rapidly evolving, with private sector engagement becoming increasingly prominent. The space economy, valued at $8.4 billion in 2025, is anticipated to reach $13 billion shortly, targeting a remarkable $44 billion within the next decade. Since its inception in 1963 with sounding rockets launched from the Thumba Equatorial Rocket Launching Station, ISRO has transitioned to launching missions from the Satish Dhawan Space Centre in Sriharikota.

With over 300 startups contributing to the industry, companies such as Skyroot Aerospace, Agnikul Cosmos, and Pixxel are gaining traction. The private sector has raised more than $415 million in funding since 2020, supported by government reforms like the 2023 Space Policy Act and the establishment of IN-SPACe, which facilitate private involvement in launches and satellite manufacturing.

Despite a 55 percent decline in funding during 2024, recovery is anticipated in 2025, with 30 launches planned in the next 15 months, including 10 orbital launches. Future objectives include the Gaganyaan crewed mission, the Indian space station, and lunar exploration. The industry is poised to become globally competitive, with a focus on private rocket launches expected to take off in 2026.

Cost Efficiency in Launch Services

India’s rockets are significantly more cost-effective than their global counterparts, primarily due to ISRO’s innovative technology. The PSLV launch costs approximately Rs 1,000 crore, translating to about $4,500-5,000 per kilogram of payload. For 30 PSLV launches between 2019 and 2024, the estimated cost totaled Rs 6,131 crore. The GSLV Mk II incurs launch costs of around Rs 2,000-2,500 crore, equating to $10,000-12,000 per kilogram for a 2-ton payload.

The LVM3’s total development cost was Rs 2,962 crore, and the government approved Rs 4,338 crore for ten rockets, resulting in a cost of around Rs 450-500 crore per launch, or approximately $15,000 per kilogram for a 4-ton GTO payload. These costs are substantially lower than those of competitors like SpaceX’s Falcon 9 or Ariane 5. The SSLV offers even lower costs, around Rs 30-40 crore per launch for small payloads, while private sector companies like Skyroot and Agnikul are targeting prices between $10-20 million for a 300 kg payload.

Overall, India’s rocket industry, with its focus on technological advancements and cost-effective solutions, is set to play a pivotal role in the global space economy in the years to come.