Interview with Lt. Gen. A.K. Bhatt: “India’s space ecosystem today is cost-competitive and innovation-driven”

India’s space sector has moved decisively from policy to execution. With private satellite launches, commercial earth observation (EO) contracts and indigenously built launch vehicles becoming a reality, the country’s space ecosystem is more competitive than ever. However, challenges around manufacturing scale, long-term capital access and assured demand remain. In an interview with tele.net, Lt. General A.K. Bhatt (Retd.), Director General, Indian Space Association (ISpA), shared his views on India’s evolving space landscape, the role of private players and the road ahead…

How has India’s space sector evolved over the past year? What does the shift from policy to execution mean for private players?

Over the past year, India’s space sector has witnessed a decisive transition from policy intent to on-ground execution, as a result of the implementation of the Indian Space Policy 2023. The historic reforms initiated in June 2020 by the government resulted in the opening up of the private industry and the establishment of institutional organisations such as the Indian National Space Promotion and Authorisation Centre (IN-SPACe) and NewSpace India Limited, along with broader space reforms. This has brought much-needed clarity and significantly lowered entry barriers for private players.

Importantly, private sector participation is evolving beyond the start-up stage into mission-critical roles across the value chain, including launch services, earth observation, satellite communications and downstream data-driven applications. For industry stakeholders, this shift has resulted in real commercial opportunities, characterised by access to contracts, asset ownership and long-term participation.

With private satellite launches, commercial EO contracts and indigenously built launch vehicles now becoming a reality, how competitive is India’s space ecosystem today?

India’s space ecosystem today is increasingly cost competitive and innovation-driven, particularly in areas such as small satellite launches, earth observation analytics and efficient engineering. What distinguishes the current phase is that these capabilities have moved beyond pilots – private launch vehicles, satellite manufacturing, and EO services will now be commercially operational, with Indian companies beginning to secure real contracts and market presence.

In comparison to global leaders like SpaceX, India still needs to build greater scale, faster decision-making processes and deeper access to long-term capital. While the fundamentals are strong, the next phase will depend on enhancing speed and investments to translate this potential into sustained global competitiveness. Government financial incentives and support would be the most critical for Indian companies to become financially viable globally.

How is ISpA working to address the remaining challenges around manufacturing scale, long-term capital access and assured demand for private space companies?

ISpA has been actively addressing the core challenges facing India’s private space sector – such as regulatory clarity, manufacturing scale, access to capital and assured demand – through close collaboration with government and industry. ISpA has been a catalyst in attracting venture capital (VC) in the space domain. This has resulted in a positive flow of capital. The Rs 10 billion VC fund announced by the government is also a very positive step.

ISpA has also played a key role in being the voice of the industry for providing industry perspective in the making of the new Indian Space Policy, foreign direct investment reforms and regulatory guidelines. To support manufacturing scale, ISpA is advocating for special economic zones for cluster-based ecosystems and stronger supply chains. For capital access, it is working to enable patient capital and risk-sharing mechanisms suited to the sector. On the demand side, ISpA is advocating for the government to act as an anchor customer and encourage long-term procurement models, while continuing to push for faster approvals, spectrum clarity and a light-touch regulatory regime to ensure ease of doing business.

How is India’s shift towards a decentralised space ecosystem reshaping the sector’s growth and innovation?

India’s transition towards a decentralised space ecosystem is both strategic and necessary to achieve its $44 billion ambition. Traditionally driven by government institutions like the Indian Space Research Organisation, the sector is now evolving into a collaborative model where states, start-ups and private enterprises play a critical role. State-level policies in Karnataka, Telangana, Tamil Nadu and Gujarat, along with emerging initiatives in states like Kerala, are enabling regional specialisation and attracting investments, while institutions such as IN-SPACe are creating a more enabling regulatory framework.

This distributed approach enhances innovation, builds resilient supply chains and accelerates commercialisation across satellite services, data applications and downstream markets. At the same time, the government must continue acting as an anchor customer and facilitator to ensure scale and sustainability. Ultimately, decentralisation is not fragmentation – it is about unlocking India’s full ecosystem potential to compete globally and capture a larger share of the rapidly expanding space economy.

How is space becoming central to modern defence, and how do you see its integration with artificial intelligence (AI) and communication networks evolving?

Space has emerged as a new domain of war, adding to land, air and sea as a critical dimension for warfare. It provides an additional layer of real-time data, acting as an eye from the sky through satellite imagery and radar to detect, track and characterise threats across large geographies, feeding actionable intelligence into command systems.

Satcom enables this intelligence to be instantly and securely communicated to operational units, ensuring connectivity without dependence while maintaining secrecy through encryption.

The convergence of space, AI, edge computing and advanced communication networks will define the next generation of defence systems. AI will process vast volumes of satellite data for real-time analytics, anomaly detection and predictive decision-making, while edge computing filters and prioritises raw sensor data into mission-relevant insights before transmission.

This distributed intelligence enhances resilience in contested or communication-denied environments, and when integrated with high speed, secure networks, enables autonomous or semi-autonomous operations that can respond faster than human decision cycles.

With India’s space economy currently valued at around $9 billion and targeting $44 billion over the next decade, which segments do you expect will drive the most growth?

India’s space economy is entering a structurally different growth phase – moving from a supply-driven, government-led model to a demand-led, private participation ecosystem. While upstream capabilities remain strong, the next wave of expansion will likely be driven by three high-impact segments:

Downstream applications (largest growth driver): Geospatial intelligence, satellite communications, climate services and defence applications will contribute the bulk of value creation. With increasing adoption across agriculture, logistics, urban planning and national security, downstream services offer scalability and recurring revenue models – something India has historically under-leveraged.

Launch services and commercial access to space: India’s cost-competitive launch capabilities are gaining traction globally. Initiatives like EO public-private partnerships (PPPs) and proposals for the PPP model for manufacturing LVM3 rockets by the private sector are strong positive signals demonstrating a shift towards the commercial utilisation of existing national assets. This improved launch cadence in the future will build global confidence and open up revenue streams from international customers.

Satellite manufacturing and private constellations: With policy reforms enabling private players, satellite manufacturing, especially small satellites and constellations, will see rapid expansion. However, scale will depend on access to capital, supply chain maturity and anchor demand.

At a structural level, the sector’s growth is no longer constrained by budget alone. Recent policy moves such as lower custom rates for space-related components are meaningful incentives that improve cost competitiveness and investor confidence. Combined with regulatory reforms, they signal a more business-friendly environment.

What is your outlook for India’s space sector in 2026? Which milestones will be most significant for the industry?

India’s space sector in 2026 is making a transition from capability-building to market scaling. The space ecosystem is no longer anchored solely in government programmes, but increasingly shaped by private capital, commercial demand and policy momentum.

In 2026, a more operationally mature and commercially active ecosystem is expected. Regulatory clarity from bodies like IN-SPACe and continued reforms will begin translating into more private missions and stronger downstream adoption. The narrative will shift from “India as a low-cost launch provider” to “India as a full-stack space economy player”. Demand from climate monitoring, precision agriculture, defence intelligence and urban planning will accelerate adoption. The real value will come from analytics layers – AI-driven insights, not just imagery – positioning EO as a critical decision-support tool across sectors. India will continue to strengthen its position in the global small satellite launch market.

Launch vehicles like small satellite launch vehicles, new private rockets and commercial utilisation of LVM3 rockets will be important milestones, especially as India builds responsive and on-demand launch capabilities. Growth in satellite platforms, subsystems and ground infrastructure will follow demand from constellations and missions. However, this segment’s scale will depend heavily on access to capital, supply chain depth and anchor customers.