Why India’s spacetech sector is outpacing the rest of deeptech
India’s deeptech startups have made significant progress in developing hardware, but many still struggle to scale commercially. Experts explain why spacetech has been the exception, and what other sectors can learn from it.
India’s deeptech ecosystem has made significant strides over the past few years. After building strong software capabilities and investing in research and development, startups are now moving beyond prototypes to pilot production, hardware deployment, and institutional procurement.
The Zinnov-Nasscom Startup Report 2025 highlights that many startups have successfully crossed the technical validation stage. The bigger challenge begins now.
According to the report, commercialising validated technology and scaling it into successful products remains India’s biggest bottleneck in the deeptech sector. Many startups are stalling between seed and Series A, caught in prolonged pilot programmes or unable to move beyond early deployments.
Yet one sector has largely bucked that trend. India’s spacetech startups have scaled hardware more successfully than many of their deeptech peers. Why has spacetech been different, and are there lessons other industries can apply from this sector?
The spacetech advantage: Six decades of inheritance
One factor that sets spacetech startups apart is the global outlook. Since the establishment of IN-SPACe (Indian National Space Promotion and Authorisation Centre) in 2020, India’s private spacetech ecosystem has built products for international markets, opening opportunities that many domestically-focused deeptech sectors have yet to access.
Moin SPM, Co-founder and COO of Agnikul Cosmos, says, “Space is a global business, so we were never building for a single market. That shaped how we approached reliability and commercial terms early on.
“Our early customers were across Europe and the US. Building for a global customer base meant meeting international standards from day one rather than growing into them later.”
Ranendu Ghosh, Co-founder and CTO of SatLeo Labs, agrees. Focusing on international markets, he says, has helped Indian spacetech companies move beyond the limits of domestic demand while testing their technology against global benchmarks.
Moin also credits Agnikul’s growth to support from organisations like ISRO and IN-SPACe. Working closely with a collaborative regulatory ecosystem, he says, has helped translate technical ambition into approved missions.
CVS Kiran, Co-founder and CEO of Red Balloon Aerospace, believes another advantage is that India’s spacetech startups did not have to build an ecosystem from scratch.
“When a spacetech startup in India needs a qualified vendor for machining, composites, avionics, or environmental testing, that ecosystem already exists,” he says.
“ISRO spent six decades building it. Thousands of small and medium suppliers across cities learned to make flight-grade hardware for government programmes long before any of us wrote a pitch deck. The semiconductor industry, for instance, had no such inheritance.”
Drawing a comparison with semiconductors, Kiran, former Vice President at Skyroot Aerospace, notes that space and aerospace hardware is “low-volume, high-value engineering”—the opposite of a chip fab.
He also points to another advantage. Spacetech startups have had something semiconductor and robotics ventures largely lack: a government that regulates, mentors, and acts as an anchor customer.
“When defence and disaster-response agencies are ready to buy Indian technology, hardware companies can scale on real orders instead of projections.”
As private participation grows, will dependence on the Indian Space Research Organisation (ISRO) diminish?
Ghosh, who spent 26 years as a scientist at ISRO, believes the relationship will evolve rather than disappear.
“As spacetech startups grow, dependence on ISRO will reduce, not only in rocket technology but across other technological areas. But ISRO will continue to play the role of mentor because of its extensive experience,” he says.
Lessons from the spacetech playbook
For Moin, one of Agnikul’s biggest advantages has been developing critical capabilities in-house, allowing the company to move faster while reducing dependence on external supply chains.
Hareesh Chandrasekar, Co-founder and CEO, AGNIT Semiconductors, believes the spacetech industry has benefitted from earlier policy support that encouraged private participation. However, he says the model offers lessons for the semiconductor industry.
“Spacetech’s structured approach is something that can be replicated for semiconductors as well. Especially the government acting as an initial customer and providing long-term contracts for strategically important use cases,” he says.
AGNIT Semiconductors is developing and manufacturing gallium nitride-based semiconductors as an alternative to conventional silicon-based technologies.
The gap that still remains
Despite its progress, India’s spacetech sector still has ground to cover before matching global leaders.
Venkat Athmanathan, a senior research scientist researching high-speed propulsion systems in the US, believes the industry’s next challenge will be scaling hardware to operate at much higher flow rates, chamber pressures, and temperatures.
“Most companies today are building what is feasible with the current manufacturing technologies. To reach parity with the most advanced launch providers in the US and Europe, India could also benefit from carefully structured technology transfer, similar to what accelerated progress during the Vikas engine programme,” he explains.
Vikas is a family of liquid-fuelled rocket engines developed by ISRO in the 1970s.
Athmanathan praises Indian startups for targeting global markets from the outset but points out that the launch services present a different challenge.
Many countries reserve a significant share of their launch contracts for domestic providers, particularly for defence and national security missions. Relying only on international commercial customers may not be sufficient over the long term, he says. A stronger market across Asia and the Middle East would help diversify opportunities for Indian launch companies.
He also believes Indian companies should benchmark their hardware more openly against global standards. Public discussions often focus on successful demonstrations, but much less attention is paid to performance metrics that allow meaningful comparisons, he feels.
Athmanathan cites rocket engine chamber pressure as an example.
“Many current-generation high-performance liquid rocket engines operate between roughly 60 and well over 100 bar, whereas Agnikul has publicly discussed Agnilet operating at around 10 bar. This comparison is not meant as a direct like-for-like comparison, as every engine is designed with different objectives and constraints," he says.
"Rather, it illustrates how much room remains before matching the performance envelope of the most advanced launch systems. That does not diminish what Agnikul has achieved. Building and successfully firing a liquid rocket engine is itself a significant engineering accomplishment.”
Publishing more quantitative performance data and benchmarking against international performance metrics would help the industry measure progress objectively and identify where future improvements are needed, he says.
At the same time, he believes India’s achievements deserve recognition. “Bringing together multidisciplinary teams, designing complete launch systems, manufacturing hardware in-house, and successfully demonstrating integrated launch capability are all significant engineering accomplishments,” says Athmanathan.