India's space regulator, the Indian National Space Promotion and Authorisation Centre, known as IN-SPACe, has proposed a policy framework that would require all launch operators to obtain third-party insurance of up to Rs 500 crore. The insurance is designed to cover damage caused by space activities to people, property on the ground, or other space objects.
The document outlining this proposal is titled Policy Framework and Guidelines Addressing State Liability Towards Third Party Damage Arising Due to Indian Space Objects. It has been accessed by businessline and marks a significant step in India's effort to bring formal regulation to the growing role of private companies in the country's space industry.
Why India Needs This Insurance Framework Right Now
India has steadily opened its space sector to private players in recent years. As more private launch operators enter the field, the need for a clear liability and insurance structure has become increasingly urgent. Under international space treaties, liability for damage caused by a space launch rests with the launching state, even when the actual launch is carried out by a private company.
This means that without proper insurance requirements in place, the Indian government could be left financially exposed in the event of a launch-related accident. The proposed framework is specifically designed to ensure that private operators carry the financial cover needed to meet such international obligations, rather than leaving the financial burden on public funds.
Key Terms of the Proposed Insurance Policy Structure
Under the proposed policy, the insurance cover would generally remain valid for one year. This period includes the re-entry phase of spent rocket stages. However, IN-SPACe holds the authority to prescribe a different duration depending on the nature of the mission. Sub-orbital launches or rocket stages used as stabilised platforms in orbit may carry different risk profiles and could therefore require a different insurance period.
The framework also includes the government as an insured entity alongside the private launch operator. Importantly, operators would remain liable for claims arising during the policy period even if those claims are actually filed within one year after the policy expires. The Rs 500 crore ceiling is expected to make insurance costs more predictable for emerging private operators who are still in early stages of planning and raising capital.
How This Differs From Own-Damage or Mission Insurance
The proposed third-party insurance is distinct from mission insurance or own-damage insurance, which protects an operator's own financial investment in a mission. Own-damage insurance typically covers events such as launch failure, failure to reach the intended orbit, or satellite malfunction during early operations.
Madhankumar Chocklingam, founder of Orbix Global, explained that if a company has invested significantly in a satellite, it may insure against launch failure, which includes failure to reach the intended orbit, problems during early operations, or subsequent in-orbit failure. The third-party insurance being proposed by IN-SPACe specifically covers risks to external parties rather than the operator's own assets, making it a fundamentally different category of cover.
PSLV-C62 Failure and Industry Push for Quick Legislation
The urgency behind this framework was highlighted by the failure of ISRO's PSLV-C62 mission in January. That mission left the EOS-N1 Earth observation satellite and 15 co-passenger payloads unable to reach their intended orbit. Industry sources noted that most payload owners involved in that mission had no third-party insurance in place to cover the resulting losses, drawing sharp attention to the gaps in India's existing space insurance arrangements.
The Director General of the Indian Space Association, Lieutenant General Retired AK Bhatt, told businessline that the third-party damage insurance framework will most likely become part of the Indian Space Activity Bill, and that this legislation needs to be passed at the earliest opportunity.
Global space insurance markets also remain under pressure. According to Aon's Q1 2026 Space Insurance Market Report, premiums for risks in 2025 exceeded 650 million dollars against approximately 503 million dollars in claims. In 2023, premiums stood at around 550 million dollars against claims of approximately 1.43 billion dollars. Chocklingam noted that the important dialogue now is around how regulation, technical risk, and insurance capacity come together, a sentiment that makes the IN-SPACe proposal all the more timely for India's rapidly expanding private space ecosystem.
