A Milestone in India’s Space Journey
Nearly three years after the inaugural launch of its Small Satellite Launch Vehicle (SSLV), the Indian Space Research Organisation (ISRO) has taken a bold step by awarding a ₹511-crore contract to Hindustan Aeronautics Ltd (HAL) for the full-scale commercialization of the small rocket. Announced on Friday, this move—heralded as the privatization of ISRO’s SSLV—marks a pivotal transition in India’s ambitions to open its space sector. However, the decision is raising more questions than celebrations.
What the Contract Entails
Unlike a typical manufacturing order, this agreement positions HAL as the owner-operator of the SSLV. As Pawan Kumar Goenka, chairman of the Indian National Space Promotion and Authorization Centre (IN-SPACe), explained, HAL’s role spans “end-to-end manufacturing, supply chain procurement, winning client orders, launching, and maintaining the rocket in the long run.”
ISRO will provide handholding support for two years, after which HAL can seek ISRO’s assistance on a commercial consultancy basis. Effectively, this sets up HAL not just as a vendor but as the strategic anchor for India’s small-satellite launch market.
Privatization or Just Another Government Handshake?
Despite the language of privatization, critics are skeptical. HAL is a public sector undertaking (PSU) controlled by the Ministry of Defence, with the Union government owning a 71% stake as of June 20. The optics, then, point less to privatization and more to intra-governmental reshuffling.
Industry analysts and proxy advisory firms like InGovern Research find the move puzzling. “It’s strange,” said Shriram Subramanian of InGovern, noting the lack of transparency about HAL’s delivery track record in space-related projects. There’s concern that the selection was more about keeping the process administratively convenient than truly opening the market to private innovation.
Behind the Scenes of the Bidding
The bidding process saw participation from nine firms. After two rounds, HAL emerged victorious, competing against consortiums led by Alpha Design Technologies (a subsidiary of Adani Defence Systems) and Bharat Dynamics. While IN-SPACe emphasizes HAL’s superior bid and technical evaluation, detractors argue that the final selection pool limited real private sector participation, as only HAL remained as a standalone bidder.
Performance Anxiety: HAL’s Track Record Under Scrutiny
HAL’s existing commitments—particularly the ₹860-crore contract (signed in 2022) to manufacture five PSLV units in collaboration with L&T—are still underway. Barenya Senapati, HAL’s director of finance, claimed progress is on track but declined to confirm delivery dates.
Meanwhile, HAL continues to face criticism from the Indian Air Force for delays in the Tejas fighter aircraft program. This history of mixed performance raises concerns about HAL’s ability to meet the demands of a fast-moving commercial space market.
Opportunity for Startups?
Some experts see a silver lining. “This may actually work in favor of private startups,” said Narayan Prasad Nagendra of Satsearch. By limiting real privatization, the government could inadvertently fuel momentum for firms like Skyroot Aerospace and Agnikul Cosmos, which are vying for clients in the small satellite launch sector. These nimble startups may now find themselves better positioned to attract commercial partnerships and venture capital, leveraging their tech agility.
A Case of Necessary Compromise?
Others argue this was the only pragmatic route. Chaitanya Giri of the Observer Research Foundation pointed out that the other two finalists were consortia, making HAL the most straightforward choice for contract execution. He suggests the decision reflects cautious commercialization rather than wholesale privatization—an effort to establish a foundational industrial actor before handing over reins to truly private firms.
The Road Ahead
For now, HAL is tasked with building credibility in an arena where timelines, cost-efficiency, and technical precision are paramount. ISRO, through IN-SPACe and NSIL (NewSpace India Ltd), will be watching closely as the SSLV becomes a testbed for India’s approach to “commercial” space exploration.
If successful, this could pave the way for deeper private participation. If not, it might reaffirm the need to separate legacy PSUs from next-generation space entrepreneurship.
Conclusion
ISRO’s handover of the SSLV to HAL may signal the start of commercialization, but it’s far from the kind of market liberalization many hoped for. While HAL must now prove its mettle in a competitive global arena, the spotlight is just as much on ISRO and the government—to show they are serious about backing innovation, not just playing musical chairs with public funds.
In the end, whether this becomes a stepping stone or a stumbling block will shape the next chapter of India’s space story.
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