April 8, 2016. The Falcon 9 rocket launched a cargo capsule to the International Space Station and its first stage landed on a floating barge off the coast of Florida, making it reusable. It was a historic first, a spectacle like never before. October 13, 2024. Elon Musk’s Space Exploration Technologies Corp aka SpaceX raised the bar even higher when it tested the much larger and heavier Starship rocket. The party piece was the return of the first-stage booster, which was plucked out of air by the giant robotic arms of the launch tower. The world gasped again.
One of SpaceX’s greatest contributions to engineering has been the normalisation of jaw-dropping feats.
Something else also happened with each of those launches. It drastically slashed the cost to reach low-earth orbit —160-1,000 km above the surface—thereby unshackling the space economy. The baseline cost of a kilogram of payload on SpaceX is estimated to be $5,000, a tenth of what it used to be.
This has resulted in an exponential growth in the number of satellites orbiting the earth— from 4,256 in 2016 to 10,019 in 2024. By 2030, the US Government Accountability Office projects this number to reach 58,000. That brings us to India and its space agency, the Indian Space Research Organisation (Isro).
For decades, Isro’s key strength in the global space arena has been its ability to deliver by making the best use of available resources. It provided low-cost access to space, thanks to its emphasis on cost engineering and resource optimisation. But Isro no longer has the cost advantage. It has lost that crown to SpaceX. The latter’s cost of access, according to various estimates, is way below Isro’s. Some analysts ET spoke to put Isro’s baseline cost at four or five times that of SpaceX. In essence, as a new space economy unfolds and as the global launch services market booms, Isro is increasingly becoming uncompetitive. Isro needs to reengineer itself to compete better in this new space era. This is something Isro chairman S Somanath himself acknowledged while delivering the Sardar Patel Memorial Lecture in New Delhi earlier this week.
“Elon Musk is making heads turn with his type of rockets, which he has captured with chopsticks. People are asking, when Isro is going to do this. I know he unsettles all of us. It is happening to the Russians, Chinese, everyone is looking at Elon Musk.”
ET’s mail to Isro has not got a response at the time of going to press.
FRUGAL ENGINEERING
To understand what needs to change, we need to first analyse what helped Isro have the cost advantage in the pre-SpaceX age. The guiding principle for the space agency, which was set up after scientist Vikram Sarabhai advocated for it in the 1960s, was to find ways of using space to improve the lives of millions in India.
Former Nasscom president Kiran Karnik, who was with Isro for 20 years from 1969, reminisces that the sharp focus in the initial decades was on developing engineering solutions at the lowest possible cost for the greater common good—from weather prediction to remote sensing to telecommunications. With such applications being the starting point, launch vehicles like the Advanced Satellite Launch Vehicle and the Polar Satellite Launch Vehicle were designed keeping in mind the mass of the satellites that were being launched.
This optimisation translated into engineering choices. For example, if there was a choice to be made between an expensive alloy, the higher grade 75 of aluminium, or a cheaper, lower-grade 65, Isro went for the latter. What counted was not just the cost of the input metal, but also of tooling and the work required, which can be disproportionately higher with higher grades of metal.
Another critical factor was labour arbitrage lower in India than in, say, the US. According to a space startup founder, the starting salary for engineers in Silicon Valley is as high as $120,000, while in India it will be a fraction of that. The simplicity of Isro’s missions also helped prune costs. While satellites with a longer life need to have levels of redundancy, most exploratory missions, including Chandrayaan and Mangalyaan, were designed for shorter mission life and had fewer components on board, all of which helped keep the costs in check.
A case in point is the payload mass of the Mars orbiter Mangalyaan, which, being a technology demonstrator, was just 13.4 kg. Meanwhile, MAVEN, a Nasa spacecraft that was also launched in November 2013, had 65 kg of various instruments as payload. Isro lost communications with Mangalyaan in 2022. In contrast, MAVEN is still going strong. There was immense optimism around 2010 that Isro was about to dominate the launch services market. Karnik says, “Ten years back, we thought we were going to be top of the world because we felt our costs were so much lower than anybody else, even lower than the Chinese.”
Then SpaceX happened.
Rajeswari Pillai Rajagopalan, resident senior fellow at the Australian Strategic Policy Institute (ASPI), says cost was what made Isro competitive till around a decade ago. “They are going to have to change in a big way. But the question is if they can change, considering their overheads are of a space agency, while they are competing with nimble startups.”
What SpaceX has done
Cost-optimisation, led by process, people and material, may not be enough for Isro to compete aggressively with SpaceX and a raft of other startups popping up in the launch services market—from the US to Rocket Lab in New Zealand to Chinese players like LandSpace.
SpaceX’s cost savings and optimisation have come from aggressively reimagining the rocket launch itself. The company approaches launches like a business, not a space agency. It emphasises on sweating the same hardware multiple times, high levels of vertical integration and increased use of robotics in manufacturing, which cuts down expenses. Its holy grail is a fully reusable rocket.
For now, reusability of the first stage of a rocket saves time in not just manufacturing but also between launches. The first stage of one such Falcon 9 rocket has been used as many as 23 times. SpaceX prefers to land Falcon 9 first stages on terra firma to reduce the cost of recovery and transportation from a barge in the ocean. It will also cut turnaround time, quite like low-cost airlines.
SpaceX’s approach to testing, too, is dif ferent. James Pethokoukis, senior fellow at the American Enterprise Institute, says in an essay on SpaceX, “Instead of extensive ground testing and a cautious pace to minimize launch failures—which can lead to longer development timelines and higher costs—SpaceX embraces rapid iteration and learning from failure.”
What ISRO needs to do:
Is it even ISRO’s dharma to compete with the likes of SpaceX?
A partner in a VC firm says the two have very different mandates.
“SpaceX is autocratically run by one individual and has an insane amount of capital to pursue their business, while Isro is a national space agency,” he says. While that is true, both SpaceX and Isro compete for the same satellite launches in an open market. It is too lucrative an opportunity to not put effort behind it. New Space India Ltd, the commercial arm of Isro, earned a revenue of Rs 2,940 crore and a net profit of Rs 467 crore in FY23. In contrast, Payload, a space news publication, projects “that SpaceX’s revenue will increase from $8.7 billion in 2023 to $13.3 billion in 2024, driven by a return to growth for customer Falcon 9 launches and Starlink’s user base growing from 2.3 million customers to 3.8 million”.
While Isro’s mandate is broader than SpaceX’s, there is serious money to be made from a massive rise in global demand for satellites and launches. Perhaps, as Rajagopalan says, the only way to do this is to increase private participation in space, just as aggressively as Nasa did in the US, giving opportunities to SpaceX. The Indian government has belatedly woken up to the importance of involving private enterprises and tapping the commercial potential of space by setting up the Indian National Space Promotion and Authorisation Centre (IN-SPACe) and a Rs 1,000 crore fund for space startups.
The startups, which were hamstrung in their initial years due to lack of risk capital for space ventures, have started finding their mojo as well as investor interest. But, Rajagopalan says, the scale and pace of involving private players may need to go up several times if India wants to compete in the launch services market of the future. Perhaps a culture change is the starting point.
Isro currently dominates India’s space apparatus.
Most people in the industry, particularly founders of startups, whom ET spoke to were afraid to come on record for fear of “how ISRO will take it”. While Isro is an organisation that makes India proud with pretty much everything it does, it needs to be “more open to experimentation,” to compete in what is going to be a highly costsensitive market, as a startup founder puts it. The government may need to invest more. The latest budget saw a 4% increase in allocation to the Department of Space to Rs 13,042.75 crore, which, while welcome, may not be enough for Isro to push the boundaries. There is also a fear that an emphasis on space applications that has made Isro what it is today, has been diluted by a growing focus on more headlinegrabbing projects. This takes attention away from boring but critical projects. An example of this is the Reusable Launch Vehicle-Technology Demonstrator, which was test flown in 2016.
It took another eight years for the next test to happen, which was an autonomous landing mission. The long gap, say those in the know, happened because it was not prioritised by India’s space administration. “Access to space has become important. Reusability has become important,” Somanath said at the lecture, indicating some of the areas Isro needs to work on. “Miniaturisation of systems, especially electronics and software, and bringing intelligence into the systems have really enabled faster development cycles, less development costs.”
Now, SpaceX has captured a rocket and thrown down the gauntlet in space. Isro has its task cut out.