India’s flourishing space-tech start-up ecosystem, boasting over 140 registered companies, has the potential to revolutionize humanity’s access to the outer reaches of space.

Back in 1963, when India was an economically challenged nation, it embarked on its space exploration journey by launching its first rocket. Despite using basic resources, such as a bicycle to transport the rocket’s nose cone, India managed to place a small payload 124 miles above Earth. At the time, India struggled to keep pace with the advancements of the United States and the Soviet Union.

However, in the present-day space race, India has gained solid ground.

In a modern and spacious rocket hangar located an hour south of Hyderabad, a thriving hub for India’s tech start-ups, a group of young engineers meticulously examined a compact experimental cryogenic thruster engine. Amidst bursts of steam, the co-founders of Skyroot Aerospace shared their excitement about witnessing the successful launch of India’s first private satellite, utilizing a rocket they had designed themselves, in November last year. These innovative thrusters will propel Skyroot’s upcoming launch into orbit later this year, carrying a significantly more valuable payload.

India has recently emerged as a hub for space-tech start-ups, with over 140 registered companies in this transformative field. This sector has become highly sought-after by venture capital investors in India. The growth of these start-ups has been phenomenal, increasing from just five before the pandemic. Moreover, they recognize the immense market potential they can tap into.

A Vision for Satellites and Scientific Power

Pawan Kumar Chandana, the 32-year-old CEO of Skyroot, envisions a global demand for launching 30,000 satellites throughout this decade. This emphasizes the significant role India is playing as a scientific power.

The importance of India’s space industry has taken the spotlight. During the recent meeting between President Biden and Prime Minister Narendra Modi in Washington, the White House highlighted their call for enhanced commercial collaboration between the private sectors of both countries in the entire space economy value chain. This recognition reflects the belief that India has the potential to emerge as a counterweight to their mutual rival, China, in the arena of space exploration.

During its initial 30 years, the Indian Space Research Organization (ISRO), often referred to as the local equivalent of NASA, brought pride to the nation. In fact, the image of India’s inaugural satellite adorned the two-rupee note until 1995. However, in subsequent years, India temporarily diverted its focus from space aspirations as young researchers prioritized tangible advancements in fields like information technology and pharmaceuticals. Yet, today, India has transformed into more than just the world’s most populous nation. It has emerged as the fastest-growing major economy and a vibrant hub of innovation.

India’s Shift to Private Enterprise and Expanding Opportunities

The landscape of the space industry has undergone significant changes. Instead of relying primarily on massive government budgets, private enterprise now drives space technology, catering to smaller-scale commercial applications. Imaging systems provide valuable data about the planet, assisting Indian farmers in insuring their crops and enabling commercial fishing fleets to track their catch. Satellites extend phone signals to remote areas and facilitate the operation of solar farms distant from India’s bustling cities.

Since June 2020, when Prime Minister Modi announced the opening of the space sector to private enterprise, India has witnessed the emergence of a network of businesses driven by original research and homegrown talent. These space start-ups attracted $120 million in fresh investments last year, with annual growth rates doubling or even tripling.

As the Indian Space Research Organization (ISRO), pronounced ISS-ro, makes way for new private players, it shares a profitable legacy with them. Located on the coastal island of Sriharikota, ISRO’s spaceport benefits from its proximity to the Equator, facilitating launches into various orbital levels. The agency’s reliable “workhorse” rocket boasts an impressive success rate of nearly 95 percent, effectively reducing satellite insurance costs and positioning India as one of the world’s most competitive launch destinations.

Opportunities for profit abound in the space launch industry, with the market estimated to be worth around $6 billion this year and projected to triple in value by 2025.

In Hyderabad, Dhruva Space, India’s pioneering space start-up specializing in satellite deployment, occupies a trendy workspace adorned with mock satellites, clean rooms for precise environmental control, and an artificial gravity testing apparatus. Kranthi Chand, the head of strategy, is frequently on the move, spending one week in Europe and another in the United States to secure clients and investors.

SpaceX’s Disruption and India’s Competitive Response

Elon Musk and his company SpaceX disrupted the space industry, stealing India’s and the world’s attention. SpaceX’s reusable rockets drastically reduced the cost of launching heavy payloads into orbit, surpassing India’s competitive capability. Even now, SpaceX offers the cheapest launches from American spaceports, priced at $6,500 per kilogram.

India possesses a wealth of affordable engineering talent, but relying solely on lower salaries is insufficient to outpace the competition. Consequently, Indian companies like Skyroot focus on providing specialized services.

“We are more akin to a cab,” remarked Mr. Chandana, highlighting Skyroot’s approach. His company charges premium rates for launching smaller payloads, whereas SpaceX operates more like a bus or train, accommodating numerous passengers bound for a single destination.

SpaceX served as a catalyst for India’s space start-up endeavors. By the time Mr. Modi prioritized the sector, some of ISRO’s own engineers, including Mr. Chandana and his partner Bharath Daka, 33, had already entered the game.

India enjoys a geopolitical advantage. Russia and China have historically offered cost-effective launch options, but Russia’s involvement as a competitor has been significantly curtailed due to the Ukraine conflict. OneWeb, a British satellite start-up, suffered a setback of $230 million when Russia confiscated 36 of its spacecraft in September. Subsequently, OneWeb turned to India’s ISRO for the launch of its next satellite constellation. Similarly, the U.S. government would be more inclined to authorize American companies to transport military-grade technology through India rather than China.

Pioneering Collaborations and Specialized Innovation

India’s expansive vendor ecosystem is of remarkable magnitude. Decades of collaboration with ISRO have spawned approximately 400 private companies clustered around Bengaluru, Hyderabad, Pune, and other regions. Each of these companies is dedicated to producing specialized components such as screws, sealants, and other space-grade products. It is not uncommon for around 100 companies to collaborate on a single launch.

While Skyroot and Dhruva operate in the more captivating fields of launch and satellite delivery, they contribute only 8 percent to India’s space industry. A significant portion of the pie is claimed by companies specializing in data collection transmitted by satellites.

One noteworthy startup in this domain is Pixxel. The company has developed an imaging system capable of detecting patterns on the Earth’s surface beyond the range of ordinary color vision. With headquarters in Bengaluru and an office in Los Angeles, Pixxel has secured a contract with a discreet agency within the Pentagon. Additionally, a considerable portion of the satellite business will inevitably be devoted to consumer broadband and TV services transmitted from low orbit.

Within Skyroot’s hangar, the company’s engineer-turned-entrepreneurs, who received education from renowned Indian Institutes of Technology and gained hands-on experience at ISRO, fluently speak the language of venture capital funding. Mr. Chandana recounts the various funding rounds, starting from the seed round, followed by the series A round of approximately $11 million, and then the bridge round of $4.5 million.

After successfully completing four funding rounds, their company’s valuation has reached an impressive $68 million. However, they have no intention of cashing out in the near future. Their enthusiasm is clearly centered around the scientific aspect rather than the business side, which neither of them had formally studied. According to Mr. Chandana, running a company is simply a matter of “common sense.”