Models of Team Indus lunar rovers on a desk. Team Indus staff visible in background.

Model lunar rovers sit at the TeamIndus mission command and control centre in Bangalore, India.Credit: Manjunath Kiran/AFP/Getty

Update: On 23 January, the XPRIZE Foundation announced that the Google Lunar XPRIZE will go unclaimed as none of the competition’s final five teams will launch a craft to the Moon by the 31 March deadline. Teams struggled to raise enough money for their missions, as well as facing technical and regulatory challenges, according to a statement by the foundation. The organization is now considering whether to continue the competition with a new title sponsor, or make it a non-cash competition.

Hopes that an Indian start-up would send the first privately owned spacecraft to the Moon have faded after it failed to raise enough money to launch its craft. But even though the lunar project won’t get off the ground as planned, the team’s success to date signals how far India’s private space industry has come in parallel with rapid advances in the country’s national space programme, say industry observers.

The group, known as TeamIndus, was one of five teams competing for the Google Lunar XPRIZE (GLXP), which will pay US$20 million to the first private company to land on the Moon, travel 500 metres and send back video by 31 March.

The Bangalore start-up was due to fly on a Polar Space Launch Vehicle (PSLV) rocket built by the country’s national space agency, the Indian Space Research Organisation (ISRO). But multiple media reports in India suggest that ISRO’s commercial arm, Antrix, cancelled the launch contract earlier this month because TeamIndus couldn’t pay for the rocket. TeamIndus declined to comment on the status of their mission and ISRO did not respond to Nature’s questions about the contract.

Although it fell short of its goal, TeamIndus say it raised about $35 million of the mission’s $70-million budget and designed, built and tested a spacecraft. The craft was also expected to carry 8 student-built science experiments that were selected from 3,000 entries submitted from around the world.

“How far TeamIndus has come in the GLXP demonstrates the growing strength of the Indian space industry,” says Carolyn Belle, a senior analyst at Northern Sky Research, a space consultancy based in Cambridge, Massachusetts. “Ten years ago, the Indian space industry was entirely focused on supporting ISRO and Ministry of Defence missions, but we are now seeing it blossom into a more commercially diverse market.”

Rahul Narayan, founder and chief executive of TeamIndus, told Nature last October that the company plans to create a business that will design, manufacture and plan missions for small spacecraft.

The miniaturization of electronics is one of the factors fuelling the growth of start-ups in India’s space industry: it has allowed companies and universities to pack communications technology, scientific instruments and other payloads onto smaller spacecraft that are cheaper to build and launch. Belle says that this emerging space market is booming globally and that India has a growing number of start-ups — including Astrome in Bangalore, which plans to launch a constellation of small satellites to provide broadband to remote regions, and Bellatrix in Mysore, which is designing propulsion systems for small satellites.

Although India can’t yet match the sophistication of US or European space engineering, says Belle, its engineers have solid technical skills; and their lower salaries significantly reduce costs and speed development. India is also easier to collaborate with, she says, than its spacefaring neighbour China, whose space industry Western companies struggle to engage with owing to geopolitical concerns. “The emerging space market in India is certainly more active and I think has more potential for near-term growth,” she says. “There’s some nice creativity coming out of India.”

Indian ISRO launcher PSLV

ISRO's PSLV vehicle has completed 39 successful launches since 1993.Credit: ISRO, INDIA

ISRO also has a reputation for successful, low-cost space missions, says Rajeswari Rajagopalan, head of space policy at the Observer Research Foundation, a think tank in New Delhi. In 2014, it became the first space agency to reach Mars on its first attempt, at a cost of just $74 million. And the agency’s PSLV, which has completed 39 launches out of 42 since 1993, is an increasingly popular launch partner for Western companies.

To meet the increasing demand for services from government, industry and the military, ISRO is transferring more of its engineering work to the private sector. But this means much of India’s private space industry is focused supplying technology to ISRO, rather than building independent space businesses, says Rajagopalan.

Many of India’s newer space businesses are also struggling because there is a lack of early stage research-and-development funding, and no legislation governing commercial space activity, which creates uncertainty for businesses, says Rajagopalan. Without more government support, she says, the country's space industry risks losing its momentum. That could leave space entrepreneurs stuck on the ground.