MUMBAI -- India's ambitious space program has spurred a number of local startups to try and build an ecosystem for the industry, which has traditionally been dominated by state-owned companies.

There are at least nine startups working in such areas as the production of small satellites and their launch vehicles, sending small satellite constellations to low Earth orbit and even planning their own moon mission.

In December, Mumbai-based Exseed Space Innovations became the first Indian company to send a communication satellite into space using a SpaceX Falcon 9 rocket. This satellite is being used by the amateur radio community.

The government's Indian Space Research Organisation, or ISRO, is set to launch its most ambitious moon mission Chandrayaan 2 on July 15. If successful, India would become the fourth country to soft land on the lunar surface, following the U.S., Russia and China. ISRO Chairman K Sivan said the mission has tech and manpower support from 500 universities and 120 companies.

"It will foster a new age of discovery, increase our understanding of space, promote more global alliances, stimulate the advancement of technology and grow commercial opportunities in India and inspire future generations," Sivan said.

According to Rakesh Sood, distinguished fellow of New Delhi-based Observer Research Foundation, the value of India's space industry is an estimated $7 billion, only 2% of the $350 billion global market. Newly appointed Finance Minister Nirmala Sitharaman on July 5 announced that ISRO will set up a new commercial arm to accelerate the transfer of technology to the private sector.

"In future, startups will lead in the demand for space tech products as companies will try expanding their own businesses," said Gateway House research fellow Chaitanya Giri. "Startups in India will, therefore, complete the ecosystem that was built by ISRO in the 1960s."

Space startups are burgeoning in China and forging ahead of India's as Beijing pushes military and civilian cooperation initiated by President Xi Jinping in 2015. Just as the Indian government is trying to catch up with China, which achieved manned space flights and built its own space station, Indian startups are chasing the Chinese.

Bangalore-based small satellite manufacturer Dhruva Space is one of those startup companies seeking new opportunities. Sanjay Nekkanti, founder and chief executive of the company, pointed to the huge potential of the space industry as only 36 countries in the world have launched space programs in the last 10 years.

Sanjay Nekkanti, founder and chief executive of Bangalore-based small satellite manufacturer Dhruva Space (Photo courtesy of the company)

"This is 2019 and we are talking about going to Mars. I am sure in the next decade all countries will try and have at least one space asset. I see that as huge market potential," Nekkanti told the Nikkei Asian Review. "Business will change the way they are working due to the advent of these new satellites."

Dhruva develops satellites with payloads up to 10 kg, which the company believes will be increasingly used in industrial applications over the next decade. These low-Earth orbit satellites decrease time delays in observation and their small size means that they are more easily observed by equipment from Earth. They also provide more frequent coverage because of more revisits.

"From a market perspective, I see tens of billions of dollars of opportunity in the next 10 years," Nekkanti said.

S. Rakesh, chairman and managing director of Antrix Corp., a commercial arm of ISRO, last year estimated that the small satellite business for India alone could potentially generate as much as 20 billion rupees ($300 million) per year over the following 10 years.

Another startup Axiom Research Labs, better known as TeamIndus, is also being closely watched as it plans India's first private moon mission. TeamIndus is one of the many teams around the world that competed for the Google Lunar XPrize of $20 million for landing a rover on the moon. However, none of the teams were successful.

TeamIndus is now part of a consortium of companies that will provide moon-landing services for NASA's next expedition in 2020.

Other startups in the upstream segment making strides are Bangalore-based Bellatrix Aerospace, small satellite launch vehicle maker Agnikul Cosmos and Kawa Space, which develops and sends small satellite constellations to low Earth orbit.

The ideas behind most of these startups were formed by their founders while they were still students. In fact, ISRO's mentorship programs can be credited with encouraging students in this area. India also has universities that offer courses in space education, and the country's advancement in technologies has also fanned those dreams.

Meanwhile, growing demand for space products such as images and GPS data are also propelling the downstream segment.

India's first private weather forecast and information services provider, Skymet Weather Services, is planning to send its own constellation of weather and agri-remote sensing satellites into space. It currently uses data from INSAT, MODIS, Sentinel and Planet Labs' CubeSat. Skymet wants to improve service quality by launching its own satellite to obtain better images faster.

The agritech startup MyCrop provides deep analysis of climate and soil quality, which is particularly useful for the farming community.

Investors are also getting excited about the space industry. On June 24, Bangalore-based seed-stage investor Speciale Invest made its third space tech investment, pumping an undisclosed amount into Astrogate Labs, which is involved in building core technologies in optical communications and networks to help satellites send more data to Earth and communicate better with nearby satellites.

Vishesh Rajaram, managing partner of Speciale Invest, said: "With the unprecedented increase in the launch of satellites for varied use cases, there is a strong need to disrupt the way satellites communicate and break barriers to increase bandwidth and reduce costs of communication."

However, tech startups still face challenges.

Both Dhruva and Skymet are awaiting policy clarity on private space tech companies. Among the issues awaiting resolution is the passage of the Space Activities Bill, which will assign liabilities for damage in outer space, in line with international standards, Giri at Gateway House said.

The bill will also provide clarity around professional and technical support for commercial space activities and regulate procedures for conduct and pricing.