The Indian Space Research Organization (ISRO) is facing continuous losses. The consequences of the failure of satellite launch vehicles were not over when ISRO faced another setback. Early this year, hundreds of its scientists and technical staff either resigned or took voluntary retirement from ISRO. The state responded vehemently, and the Department of Space issued a memorandum in July 2026 that stripped the directors of ISRO centres of the power to accept the resignations of “Group A” scientific staff. According to the new rule, requests for voluntary retirement and resignation from personnel on Gaganyaan and other “strategic missions” now have to go through Delhi for a final decision. The resignation of more than 100 critical scientific staff is not the result of a sudden blow or any conspiracy, but rather a reflection of deeply rooted structural fault lines and the outcome of the state’s policies.
The state’s monopoly could not achieve Indian space aspirations, so the government expanded space for private companies. The entire space value chain was opened to private players in 2020 by establishing the Indian National Space Promotion and Authorisation Centre (IN-SPACe). It acts as a bridge between ISRO and private space companies. Furthermore, it authorizes private satellite builds, launches, and space-based applications. It also facilitates the sharing of government-controlled space facilities. In 2023, India released its Indian Space Policy that explicitly opens the national space sector to non-governmental entities (NGEs), allowing private companies to build rockets, manufacture satellites, offer commercial launch services, and undertake space exploration.
In 2014, one company, Skyroot, set the foundation for the commercialization of space in India, which has now grown into an ecosystem of 440 registered companies. By March 2026, these space start-ups have attracted investment worth $618.5 million, with nearly $150 million in 2025 alone. Some of the leading space companies are Skyroot Aerospace, Bellatrix, Pixxel, Dhruva Space, and Agnik Cosmos. However, the commercialization of space in India backfired and ultimately led to a crisis of exodus of the scientific community from the government space agency. The problem is not commercialization itself but the lack of reforms in government space agencies.
The state did not anticipate that the private sector would grow to a point to be able to replace the state with the same engineers that have been created. The scientists who are leading such smaller companies like Skyroot and Agnikul are trained by ISRO. Those companies provide more incentives such as better salaries, more compensation, equity, and exposure throughout a career, compared to what ISRO can offer. It is not the traditional brain drain of scientists going to the West. It’s a lesser sin: the state paid and suffered.
The departure of scientists did not cause structural faults, but it exposed decades-old bureaucratic systems. Centralisation of ISRO’s decision-making process is directly proportional to the structural constraint upon the serving people. Several current and former officials underscored the role of the increasingly bottlenecked Chairman’s Office as the cause of distress. Other factors add fuel to the fire, such as career mobility being slow and rank-bound. It was the only thing that was a secure option for an Indian aerospace engineer in the past. The norms that determine pay are set by civil service norms and not contemporary stock options. Now, exit from the service itself is bureaucratized to a questionable extent. An organisation that has failed to retain its talent by providing opportunities is trying to bind people through paperwork, and disguising it as policy.
Commercial actors work on the logic of incentive and government-run bodies on the rules of bureaucracy. Innovation comes from incentive and risk-taking and not from a bureaucratic model of obedience. On the other hand, government agencies are founded on caution and accountability, since they are held to Parliament, not to a board seeking to raise the next round of funding. Thus, freezing resignations is a few quarters’ time only.
This isn’t a domestic issue; rather, it has strategic consequences. Scientists who left are well-trained and well-equipped for major Indian space programs like Gaganyaan, dual-use satellites, and launch capabilities. The institutional memory, tacit knowledge, and mission-specific judgment of these programmes are impossible to replace; it takes years of onboarding to develop. It will take decades to recruit people of similar intellect and knowledge and train them for future projects while maintaining the centralized decision-making process. Hence, the cost that India has to pay is waiting. Gaganyaan, Chandrayaan-4, as well as Bharatiya Antariksh Station are delayed because of the same stressed human resource. It highlights the disconnect between India’s “space goals” and its capacity to achieve them. In a nutshell, the July 14 memo focuses more on administrative posture rather than addressing structural faults. ISRO is facing the consequences of its structural flaws and immature policies. Commercialization of space is a global phenomenon, yet the state’s loss of its own talent at the hands of its own private companies is no less than a nightmare come true for India. The state’s difficult and crushing exit system from ISRO will also decrease entry into the organization. Young talent does not limit itself to one institution; they go for incentives and flexible workplaces. This is what deprives the state of talent and expertise.
This article was published by the Centre for Strategic and Contemporary Research (CSCR) in another form at https://cscr.pk/explore/themes/defense-security/isros-quiet-loss-of-its-critical-asset/
Areesha Manzoor is Research Assistant at the Center for International Strategic Studies (CISS), Islamabad.
