The 2,230-kg communication satellite, which Indian space research organisation ISRO calls GSAT-9, has been fabricated over three years. It would have cost the participating nations almost $1,500 million over its 12-year life.

The government says the satellite will "enable a full range of services to neighbours". The areas will include telecommunication, television, direct-to-home, VSATs, tele-education and telemedicine.

It can also provide secure hot-lines among the participating nations, which will be useful in case of management of disasters like earthquakes, cyclones, floods and tsunamis.

The "South Asia Satellite" has 12 transponders -- devices for forming a communication channel with radio signals. Each nation will get access to at least one transponder, through which they could beam their own programming. Each nation has to develop its own ground infrastructure, but India is willing to extend assistance.

A month after the Narendra Modi government took over, the Prime Minister had asked the space community to "take up the challenge of developing a SAARC satellite that we can dedicate to our neighbourhood as a gift from India".

The surprise announcement of the "valuable gift to our SAARC countries" came as the Prime Minister addressed the scientists at ISRO after a successful launch of a satellite.

"Prime Minister Modi has actually extended his slogan 'Sab Ka Saath Sab Ka Vikas' to India's neighbourhood essentially to service the needs of the poor in South Asia," said Prashant Agarwal, engineer and the point-person in the Ministry of External Affairs that's piloting the project.

At the planning meeting on June 22, 2015, Pakistan decided to 'opt out' of the proposed SAARC satellite suggesting that it had its "own space programme". Pakistan has five satellites but lacks heavy duty launchers and satellite fabrication facilities. Sources said Pakistan was not allowed to veto the project, which was renamed "South Asia Satellite".

Three SAARC nations already have full-fledged communication satellites: Pakistan and Sri Lanka have been helped by China and Afghanistan has a communication satellite which is an old India-made satellite acquired from Europe.