New Delhi: The Rs 1,200 crore government contract to design, develop, and operate India’s first commercial Earth Observation Satellite (EOS) series was awarded nearly a week ago. Now, many space startups are questioning the bidding process.
Bengaluru-based PixxelSpace-led consortium’s so-called ‘zero-bid’ won the contract.
However, India’s still nascent private space industry is beginning to air concerns about the way it all unfolded. Their main problem is that the PixxelSpace-led consortium has the strong backing of foreign funding—a clear advantage over competitors. And, it did not require matching funding from the government.
Many Indian space startups and competing bidders have shown concerns over the decision to award the contract to the PixxelSpace-led consortium, which does not need any financial support from the government. It will discourage smaller home-grown companies, which are currently building their operations in the sector with no financial foundation, they feel.
IN-SPACe, India’s regulator and promoter of private space activities, conducted the bid on the condition that the companies will finance the programme costs—Rs 1,200 to Rs 1,500 crore—and as part of the L1/lowest bid, IN-SPACe will offer a repayable loan of up to Rs 350 crore, or up to 30 percent of the bidding amount, whichever is lesser.
IN-SPACe, or the Indian National Space Promotion and Authorisation Centre, announced the handing over of the contract to design, build and operate a 12-satellite series to the PixxelSpace-led consortium, which quoted Re 0, meaning it sought no government funding for the public-private partnership (PPP) project.
The PixxelSpace-led consortium, which also included Piersight Space, SatSure Analytics, and Dhruva Space, went against two other consortia. The first one led by Hyderabad-based Astra Microwave Products, with two more companies, Bharat Electronics and Sisir Radar and Spectragaze Systems, in the consortium, bid Rs 200 crore. The second bidder, Bengaluru-based GalaxEye Space, along with CoreEL Technologies, bid Rs 97 crore.
“The government says it wants to support Indian private companies, to help them stand on their own. And then, they go on to partner with a consortium that did not even need the assistance … a misdirected push from IN-SPACe,” a senior scientist with one of the bidding companies told ThePrint.
The scientist added that if the PixxelSpace-led consortium was capable enough to build and operate the satellite series without financial support from IN-SPACe, it should have refrained from entering the bid process.
“This was a missed opportunity for others. For Pixxel, it is just a PR stunt,” the scientist said.
PixxelSpace founders Awais Ahmed and Kshitij Khandelwal are Indians. However, concerns arise as a majority of the company funding comes from formidable foreign investors, mainly from the US, the UK, Canada, and Ireland.
Some of the big investors supporting PixxelSpace operations include Google, Radical Ventures, Lightspeed, M&G Catalyst, and Glade Brook Capital Partners.
“Look at it this way. There is a government loan provision for the EWS (Economically Weaker Section) to build a house. Instead of giving this loan to those who need it, you give it to someone who neither needs the finance nor needs the house. That is unfair,” the scientist said.
Another official associated with a startup that participated in the IN-SPACe bid told ThePrint that while technically the Pixxel-led consortium won the bid fair and square, the partnership between the winning consortium and IN-SPACe was meant to be transactional—IN-SPACe provides the finance and other technical support, and the winning consortium designs, builds and operates the satellites, according to the space promoter’s requirement.
The terms of the RFP (request for proposal) was that the consortium deposit a bank guarantee with IN-SPACe in lieu of the interest free “soft loan” that the space promoter was offering. The consortium would be liable to pay 10 percent of their annual return to IN-SPACe for this financial backing.
In return, the consortium was bound by IN-SPACe’s ‘technical requirements’ of centering the EOS project around four satellite types—optical (uses optical sensors to capture images of the Earth’s surface by detecting reflected sunlight), hyperspectral (equipped with a hyperspectral sensor that captures images across a wide range of electromagnetic wavelengths), multispectral (carries sensors capable of capturing data across multiple bands of the electromagnetic spectrum, beyond the visible range) and synthetic aperture radar or SAR (utilises radar technology to create high-resolution images of the Earth’s surface).
“Now that the Pixxel consortium is not taking anything from the government, they can choose not to honour the technical requirements. They can very well base the project around their existing capabilities, and the government will in no way be able to hold them to the terms,” the official said.
For the PixxelSpace-led consortium, the ‘zero bid’ was a way to ensure that the project could not be outbid, given its national importance.
PixxelSpace founder-CEO Ahmed told ThePrint that for the company, the partnership with IN-SPACe comes with non-financial gains, the most significant of which is the “opportunity to deliver a programme of strategic national significance, reducing India’s reliance on foreign EO data and strengthening sovereignty”.
“For Pixxel, the gain is not subsidy but the mandate to anchor India’s national EO system, which brings responsibility and credibility. The PPP aligns complementary strengths for our partners: Dhruva Space contributes proven satellite platforms and ground infrastructure, SatSure brings advanced analytics and user applications, and PierSight adds SAR and maritime monitoring,” Ahmed said.
He added that such a partnership would create an ecosystem stronger than a single company could deliver alone—a constellation integrating multiple sensing modalities, capable of serving both national priorities and global markets at scale.
According to IN-SPACe, for the first time in the history of the Indian space sector, a private consortium will invest more than Rs 1200 crore over the next five years to launch a constellation of 12 Earth Observation satellites, equipped with panchromatic, multispectral, hyperspectral, and microwave SAR sensors.
The constellation will deliver analysis-ready data (ARD) and value-added services (VAS) for applications in climate change monitoring, disaster management, agriculture, infrastructure, marine surveillance, national security, urban planning, and cater to the global demand for high-quality geospatial intelligence.
IN-SPACe chairperson Pawan Goenka told ThePrint the government offered financial support of up to 30 percent of the lowest bid amount to the bidding consortia. However, the winning bidders did not want any government funding.
Earlier in June, IN-SPACe conducted another bid—H1/highest bidder—for the technology transfer of the Indian Space Research Organisation (ISRO) innovation, the Small Satellite Launch Vehicle (SSLV). Hindustan Aeronautics Limited (HAL) won the bid.
“We need to see this in a positive light. If the private players have such confidence in the opportunities in the Indian space, that is a strong statement. It means they are sure that they will be able to get returns from this partnership,” Goenka said.
Opportunity ‘bigger than money’
The terms of the contract say the Earth observation constellation will be deployed over the next four years in a phased manner to ensure continuous service upgrades and expanded coverage.
Once operational, the project, designed, built, and operated entirely in India, promises to be among the most advanced Earth observation systems globally.
The ownership of the satellites and data will be with the consortium, but IN-SPACe will facilitate some access or distribution for some Indian government users. Sensitive data required for national security or strategic purposes will remain under strict Indian control, with safeguards built into the operating framework to ensure it is not shared externally.
“At the same time, the consortium will also retain the ability to commercialise data globally, with private and international customers. This approach balances sovereign access with commercial viability,” PixxelSpace CEO Ahmed said.
An official from another Indian space tech startup said that the government’s push for Indian space tech startups does not stand ground with its partnership with the PixxelSpace company, since a majority of its funding comes from foreign investments.
“The whole ethos after which IN-SPACe got built was to provide a platform to Indian companies. At least 80 percent of Pixxel’s funding is foreign,” the official said.
According to its website, the US is the primary source of investment capital for PixxelSpace. In 2023, US-based Google led PixxelSpace’s $36 million funding as part of the Series B stage of venture capitalist funding, when a company has proven its product is market-fit and ready to scale operations. It was the single-largest chunk of funding.
Companies like Accenture Ventures, Jordan Noone and Sparta—all US-based—are also investors in PixxelSpace.
However, IN-SPACe officials do not see this as a problem.
“Space is a global sector, and that is the way to expand operations. You cannot limit a company’s growth by mandating that it operate only in India. We want companies to raise demand for their products and technology, and many companies are raising funds from foreign investments,” an official said.
(Edited by Madhurita Goswami)
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