Bangalore: The commercial arm of India’s space agency Antrix Corp. Ltd is in talks to build three satellites for foreign firms and has at least four launch orders. It is also expecting domestic demand for communication transponders and satellite imagery to drive growth over the next few years.

Launching pad: A 20 Dec photo of the Ariane rocket, carrying the W2M satellite, taking off. Martin / AFP

Astrium, the satellite-making unit of European Aeronautic, Defence Space Co., or EADS, which subcontracted these satellites to Antrix, signed a pact in September to promote the polar satellite launch vehicle, or PSLV, its workhorse rocket for global customers.

“There is a huge unmet local demand for DTH and communication transponders," said Madhavan Nair, chairman of Isro, in a phone interview.

Isro plans to increase communication transponder capacity to 500 from the existing 224 by 2012, on growing demand from direct-to-home satellite operators and very small aperture terminals or VSAT for business communication. It has 11 remote sensing satellites in orbit and plans nine more, including a few scientific satellites.

The demand for urban mapping in India and high-resolution images at nearly $7 per km, nearly half of that foreign satellite firms charge, is also adding revenue. “Nearly 60% of our revenue comes from domestic customers," Nair said.

India is still a fledgling player in the satellite manufacturing and launch industry, which is expected to grow to $145 billion to 2016, according to Paris-based research firm Euroconsult.

U. Sankar, professor at the Madras School of Economics, who did a cost-benefit analysis of the space agency in 2006, said the cost of launching a satellite on PSLV was one-third lower than foreign launchers. It is due to the high degree of indigenisation and lower cost of labour, he said.

An analyst says the global satellite and launcher market has entry barriers for India, despite lower costs and capability, due to the limited number of players and launches of satellites a year.

“However, to covert all of them into market opportunities is tough. Europe, America, Russia and China, every one will protect their interests," said Y.S. Rajan, principal adviser on the space industry for the Confederation of Indian Industry.

According to Rajan, Indian space industry will benefit from down stream activities of space such as receivers, ground support services, satellite imagery and processing, which is expected to double to Rs12,000 crore in five years.