India's space regulator proposes mandatory third-party insurance of up to ₹500 crore for private launch operators, shifting liability to industry. The draft framework would be part of the pending Space Activity Bill.
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India's space regulator has proposed a framework that would require private launch operators to carry third-party insurance of up to ₹500 crore to cover damage to people, property on the ground, or other space objects. The draft policy, released by the Indian National Space Promotion and Authorisation Centre (IN-SPACe), aims to meet the country's international liability obligations while giving emerging private players a clearer cost picture.
Lt Gen (Retd.) AK Bhatt, director general of IN-SPACe, told businessline that the third-party damage insurance framework will most likely be part of the Indian Space Activity Bill. That legislation, he said, needs to be passed at the earliest. Under the proposed rules, the operator bears liability for claims arising during the policy period even if the claim is filed within a year after the policy expires.
The coverage applies to launch vehicles and payloads. The government is also named as an insured entity. Insurance would generally be valid for one year, covering the re-entry phase of spent rocket stages. IN-SPACe can prescribe a different period depending on mission type, such as sub-orbital launches or when a spent stage remains in orbit as a stabilized platform.
The ceiling is intended to make insurance costs more predictable for startups and established players alike. The draft document states that the operator shall maintain third-party insurance for an amount determined by IN-SPACe subject to a maximum of ₹500 crore. The policy would nominally run one year, with possible adjustments.
International space treaties place liability on the launching state even when a private entity conducts the activity. The framework is designed to shift that financial exposure to the operator instead of leaving the government on the hook. It is distinct from mission insurance or own-damage cover, which protects an investor's satellite against launch failure or in-orbit malfunction.
Madhankumar Chocklingam, founder of Orbix Global, said a company that has put significant capital into a satellite may insure against launch failure, early operations problems, or subsequent in-orbit failure. Industry sources noted that most payload owners on the failed ISRO PSLV-C62 mission in January had no third-party cover to cushion losses. That mission left the EOS-N1 Earth observation satellite and 15 co-passenger payloads stranded in a wrong orbit.
Availability and pricing of space insurance remain challenging across the sector. Aon's Q1 2026 Space Insurance Market Report showed that premiums for risks attaching during 2025 exceeded $650 million, compared with about $503 million in claims. In 2023, premiums were roughly $550 million against claims of about $1.43 billion, highlighting the sector's volatility.
Chocklingam said the important dialogue now revolves around how regulation, technical risk, and insurance capacity come together. The proposed ₹500 crore ceiling is one piece of that puzzle. The broader market dynamics will determine whether the framework delivers the clarity operators are looking for.
Bhatt said the proposal will most likely be folded into the Indian Space Activity Bill, which still needs to be passed by Parliament.
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