India Has a Frugal Approach to Space Flights. But Cheaper Doesn't Mean Cheap

India’s space programme has long been defined by doing more with less. But the country’s approach to cutting costs is increasingly less about the budget alone and more about necessity—forcing engineers to rethink how missions are designed, tested, and executed.

While the total budget allocation of the Department of Space has remained broadly stable in absolute terms, its relative fiscal importance has declined steadily. The allocation fell from ₹13,949 crore in 2021-22 to ₹12,544 crore in 2023-24, before recovering to ₹13,416 crore in 2025-26. 

However, the department’s share of the Union Budget has dropped more sharply, from 0.40% in 2021-22 to 0.26% in 2025-26, while its share of India’s GDP has declined from 0.05% to 0.03%. 

This suggests that although the government is not substantially cutting spending in absolute terms, allocations have not kept pace with the growth of overall government expenditure or the economy. 

It also underline the importance of India’s traditional frugal engineering approach—sustaining a more ambitious space programme while extracting significantly greater capability from every rupee invested.

However, Aniruddha Mukhopadhyay, S&A Lead, Chief Technologist, Synopsys, believes that global space startups that look cost-efficient on paper are usually hiding a much larger bill. 

"Look at the other global space startups. The successful ones are 100% government funded, and when I'm saying funded, they are not funded for project success. They are funded for efforts," he tells AIM.

That Western funding model lets players fail repeatedly before they succeed and then advertise only the final number. His conclusion is pointed. 

"What India is doing is that $12,000, it should be $3,000," he says, referring to the recent study published in Economics Letters which observed that the average estimated cost of placing a kg of payload into low Earth orbit was more than $13,000 in India, compared with $3,225 in the US. However, the figures are not indicative of the price charged for an individual rocket launch.

Budget Line Keeps Shrinking

The scale of that ambition becomes clearer against global benchmarks. Mukhopadhyay points to NASA's Discovery Programme, where space missions cost $450–460 million dollars, and has come down to $70 million. 

India operates in an entirely different bracket. "For India, that is $15–20 million," he states.

Even so, he pushes back on the idea that constrained budgets mean a constrained programme. "Nobody else has put a satellite on the south pole of the moon," he adds. Frugality, in his telling, isn't a ceiling on what India can achieve. It's how it gets there. 

"We are not slowing down going to space within the means we can. We are making it more efficient," he boasts.

On whether India's space ambitions require bigger budgets, Mukhopadhyay argues that falling technology costs, not rising allocations, make space missions possible. 

He also points to a parallel frugality decision in energy. India has shown rapid progress in fission technology, achieving criticality for the 500 MW Prototype Fast Breeder Reactor at Kalpakkam in April 2026, marking a critical transition into the second stage of its indigenous three-stage nuclear programme. It. positions the country to solve its power problem in a way that can free up funds and will be a reliable power source. 

"I Would Not Call it Frugal"

Not everyone in the ecosystem embraces frugality framing. 

"I would not describe India's space policy as frugal; I would describe it as evolving," Chetan Mehta, Founding Partner at Aum Ventures, notes. He points to structural reforms such as opening the sector to private participation, establishing IN-SPACe as the regulator, and enabling private access to ISRO facilities.

For Mehta, the more useful question isn't how little the system spends, but what it spends on next.

 "Policy needs to move beyond enabling participation to actively creating demand," he argues, holding up NASA's Commercial Crew programme as the model to emulate. "It helped create companies like SpaceX by acting as an early customer rather than trying to do everything itself." 

What Indian startups need now isn't cost efficiency alone but predictable government procurement, access to long-term contracts, insurance frameworks, and regulatory approvals. As he put it, "Policy is no longer the biggest bottleneck; it is now about execution and creating sustained commercial opportunities for private companies."

Still Capital-Intensive

Yet, the cost still matters. Cheaper doesn't mean cheap.

"Although development costs in India are significantly lower than in many other countries, building space hardware still requires more capital than a typical software startup," Mehta says. 

Long development timelines add to that burden. Developing launch vehicles, satellites, propulsion systems or in-orbit technologies requires years of engineering, testing, and regulatory approvals before meaningful revenues are generated. This is why capital needs to be patient.

"Investors need patience and a longer investment horizon," he adds.

Technical risk compounds the picture too, since a single failed mission can delay commercialisation no matter how lean the programme is.

Still, Mehta sees the same underlying payoff Mukhapadhyay describes about steep barriers to entry that reward those who clear them. "If a company succeeds, it often builds proprietary intellectual property, deep engineering capabilities, and long-term competitive advantages that are difficult to replicate," Mehta states.

 "Companies such as Skyroot have demonstrated that Indian private space companies can build world-class technology. The next challenge is scaling globally and building sustainable commercial businesses. That is where the next decade of value creation will come from," he adds.

The ISRO-to-Startup Pipeline

India's frugal space sector doesn't just run on lean budgets. Rather, it runs on inherited talent. 

Mehta frames the well-documented flow of scientists from ISRO into startups as a feature of the ecosystem rather than a problem to be solved. 

"ISRO has spent decades creating one of the world's finest pools of space scientists and engineers. Many entrepreneurs building today's space startups are products of that ecosystem, bringing with them technical expertise, systems engineering capability and experience working on complex missions," he explains.

The upside is that expertise once locked inside a government agency is now building companies directly.

"Scientists who may not have had the opportunity to build products for commercial markets within a government organisation can now create globally competitive businesses," Mehta says.

"The long-term goal should not be to prevent scientists from leaving, but to ensure there is enough talent flowing into both public and private sectors," he states.

But to keep India’s rockets and space ambitions soaring with human spaceflight, reusable launch vehicles, deep space missions and greater private-sector participation, the funds—both budget outlay for the Department of Space and venture capital investments—need to balloon too. After all, with the rupee depreciating, it can now only go so far.