TDB-DST signs agreement with Manastu Space for ₹116 crore RDI support to advance indigenous green propulsion technology

1. At a Glance

• The Technology Development Board (TDB) under the Department of Science & Technology (DST) signed an agreement with Manastu Space Technologies Pvt. Ltd. (Navi Mumbai). TDB will provide ₹116 crore under the Research Development and Innovation (RDI) Fund for a green propulsion system for satellites and launch vehicles. [1]
• The support is given as Optionally Convertible Debt (OCD). It is not a grant. [1]
• The project aims to take the technology from TRL-6 to TRL-9 using a hydrogen peroxide-based green propellant. [1]
• Why it matters for UPSC: it connects the ₹1 lakh crore RDI Scheme, private participation in the space sector, deep-tech financing, and sustainable or "green" access to space (GS-III S&T and Space). [1][2]

2. Why in the News

• On 26 October 2026, PIB reported that TDB-DST had signed the agreement with Manastu Space for ₹116 crore of RDI support. The total project cost is ₹277.63 crore. [1]
• This is a live example of RDI Fund money reaching a private deep-tech/space startup through a Second-Level Fund Manager structure. [1][2]

3. Background & Evolution

• 1995: Parliament enacted the Technology Development Board Act, 1995 (Act No. 44 of 1995). It created a Board to give equity capital or other financial assistance to industrial concerns and agencies that develop indigenous technology or adapt imported technology. [4][5]
• The Act also set up the Fund for Technology Development and Application. [5]
• 1 July 2025: the Union Cabinet approved the RDI Scheme, with a total outlay of ₹1 lakh crore over 6 years and ₹20,000 crore for FY 2025-26. [2]
• 3 November 2025: the Prime Minister formally launched the scheme. [3]
• RDI Fund structure: a Special Purpose Fund (SPF) under the Anusandhan National Research Foundation (ANRF) is the Level-1 Fund Custodian. Second-Level Fund Managers (SLFMs) do the actual lending and investing. [2]
• ₹1,000 crore each has been sanctioned to TDB and BIRAC, a total of ₹2,000 crore. [3]
• 26 October 2026: TDB signed the Manastu Space agreement under the RDI Fund. [1]

4. Core Static Facts

Parameter	Fact	Src
Funding body	Technology Development Board (TDB), DST, Ministry of S&T	[1]
Statutory basis of TDB	Technology Development Board Act, 1995 (Act 44 of 1995)	[4]
Beneficiary	Manastu Space Technologies Pvt. Ltd., Navi Mumbai, Maharashtra	[1]
Support amount	₹116 crore	[1]
Total project cost	₹277.63 crore	[1]
Instrument	Optionally Convertible Debt (OCD)	[1]
Fund	Research Development and Innovation (RDI) Fund	[1]
Thrust range	5 mN to 300 N	[1]
TRL target	TRL-6 → TRL-9	[1]
Propellant	Hydrogen peroxide-based green propellant with additives	[1]
Key component	Ultra-high-temperature ceramic catalyst; engines plus propellant feed systems	[1]
Sector / sub-sector	Deep Technology / Space Technology	[1]
Flight heritage	The propulsion system has already been demonstrated in space	[1]
TDB Secretary	Shri Rajesh Kumar Pathak	[1]
RDI Scheme outlay	₹1 lakh crore over 6 years; ₹20,000 crore in FY 2025-26	[2]
RDI nodal department	Department of Science & Technology	[2]
RDI custodian	SPF within ANRF (Level-1)	[2]
RDI eligibility	Projects at TRL-4 and above	[2]
RDI financing cap	At most 50% of assessed project cost	[3]
RDI instruments	Long-tenor, low- or nil-interest loans (expected to be unsecured); equity especially for startups; contributions to a Deep-Tech Fund of Funds; no grants	[2][3]

Key terms

• Technology Readiness Level (TRL): a 1–9 scale of how mature a technology is. TRL-6 broadly means a prototype has been demonstrated in a relevant environment. TRL-9 means the actual system has been proven in operational missions. (Standard NASA-origin scale; this definition was not retrieved from a cited source, so verify it.)
• Optionally Convertible Debt: a loan the lender may choose to convert into equity. This matches the RDI Scheme's mix of debt and equity. [1][2]
• Green propellant: a propellant that is less toxic and safer to handle than conventional propellants. The PIB release refers to "reducing the operational challenges associated with conventional propellants". [1]

5. Multi-Dimensional Analysis

Scientific / Technological

• A single scalable architecture covers 5 mN (small-satellite attitude/orbit control) to 300 N (higher-thrust systems). One platform serves several classes of mission. [1]
• The ultra-high-temperature ceramic catalyst is the core technical element. Hydrogen peroxide (H₂O₂) systems depend on the catalyst decomposing the propellant reliably. [1]
• TRL-6 → TRL-9 covers the "valley of death" between a demonstrated prototype and flight-qualified deployment. The work includes engineering, system integration, testing and validation. [1]

Economic

• TDB's ₹116 crore is about 41.8% of the ₹277.63 crore project cost. That is within the RDI cap of ≤50% of assessed cost; the developer must arrange the rest. [1][3]
• The OCD/loan model lets money flow back and be reused, and gives the government a chance to share in the upside. This differs from the grant-based R&D model, since the RDI Scheme gives no grants. [2][3]
• The release frames this as cost efficiency and better economics for space missions in the growing space economy. [1]

Strategic

• The release says the project aims to "reduce reliance on externally sourced technologies" in a critical component of the space value chain. [1]
• Building domestic propulsion capability supports self-reliance (Atmanirbharta) in both satellite and launch-vehicle subsystems. [1]

Environmental

• A green propellant for sustainable access to space improves safety and reduces the handling burden of conventional toxic propellants. [1]
• Context (not from cited sources): conventional in-space propulsion often uses hydrazine, which is toxic. When H₂O₂ decomposes, the products are water and oxygen.

Governance / Administrative

• The RDI money passes through two layers, ANRF-SPF → SLFM (TDB) → private firm. This keeps project selection and risk assessment with specialised managers rather than with ministries directly. [2][3]
• The RDI Scheme's TRL-4+ eligibility rule points the money at technologies that are ready to be scaled up, not at basic research. The Manastu project starts at TRL-6. [1][2]

6. Recent Developments (last 12–18 months)

• 1 July 2025: Cabinet approved the RDI Scheme (₹1 lakh crore over 6 years). [2]
• 3 November 2025: the PM formally launched the RDI Scheme. [3]
• 2025–26: TDB and BIRAC were each sanctioned ₹1,000 crore under the RDI framework. [3]
• 26 October 2026: TDB–Manastu Space agreement signed: ₹116 crore OCD, green propulsion, TRL-6 → 9. [1]

7. Prelims Hooks

• TDB is a statutory body under the Technology Development Board Act, 1995 (Act No. 44 of 1995). [4]
• TDB works under the Department of Science & Technology, Ministry of Science & Technology, not under ISRO or IN-SPACe. [1]
• Manastu Space is based in Navi Mumbai, Maharashtra. [1]
• RDI support to Manastu: ₹116 crore; total project cost ₹277.63 crore. [1]
• Funding instrument: Optionally Convertible Debt (OCD). [1]
• Thrust class: 5 mN to 300 N. [1]
• Maturity target: TRL-6 to TRL-9. [1]
• Propellant: hydrogen peroxide-based green propellant with additives. [1]
• Catalyst: ultra-high-temperature ceramic catalyst. [1]
• The project's sector is Deep Technology, sub-sector Space Technology. [1]
• RDI Scheme: ₹1 lakh crore over 6 years, approved by Cabinet on 1 July 2025. [2]
• The RDI Fund's Level-1 custodian is a Special Purpose Fund within ANRF. [2]
• RDI Scheme nodal department: DST. [2]
• RDI Scheme gives no grants. Funding is capped at 50% of project cost, and only projects at TRL-4+ are eligible. [2][3]
• RDI Scheme launched by the PM on 3 November 2025. [3]

8. Why This Loan Is a Risk the Government Chooses to Carry

• The money is a loan, but the borrower gives no security for it
• RDI loans are expected to be unsecured. That means no collateral (property the lender can take if the loan is not repaid) [2].
• A PIB Parliament reply says the framework is collateral-free and needs no personal or corporate guarantee [3].

• If Manastu fails, TDB has little to recover. The public loses the money, much as it would with a grant.

• Converting the loan to shares does not remove the risk. It changes the risk.

• Under Optionally Convertible Debt (OCD), TDB may take equity (part-ownership shares) instead of being repaid [1].
• This pays off only if the company grows in value. If it struggles, TDB holds shares in a weak firm instead of a debt it can claim back.

• So the real test of the "no grants" design comes years later. It is whether money comes back, not whether it was signed out [2][3].

• Why carry the risk at all: the counter-case, answered honestly

• Strongest objection: it is not the state's job to back one private startup with unsecured public money. Private venture capital should take this risk.
• What is right about it: the agreement shows no open competition for this money, and no published scoring [1].
• The answer: moving from TRL-6 to TRL-9 needs flight-testing over years. Private investors rarely fund that stretch. This is why the RDI Scheme exists [2].
• The design also limits the exposure. TDB pays only ₹116 crore of ₹277.63 crore, so the firm and its investors carry more than half [1][3].

9. Flying Once in Space Is Not the Same as TRL-9

• The "already demonstrated in space" claim is real but narrow
• Manastu's VYOM-2U payload flew on ISRO's POEM-4 platform with PSLV-C60 (the SpaDeX mission) [6].
• POEM (PSLV Orbital Experimental Module) uses the rocket's spent last stage as a short-life test bed in orbit.

• The payload's aim was to demonstrate a hydrogen peroxide thruster as a safer alternative to hydrazine [6]. That is a technology test, not years of service on a working satellite.

• TRL-9 means proven in real, repeated missions

• The project's own goal is TRL-6 to TRL-9 across 5 mN to 300 N [1].
• The PIB release does not say what thrust level has already flown [1]. The 300 N end, meant for higher-thrust and launch-vehicle use, is a much bigger engine than a small satellite thruster.

• Each thrust class may need its own qualification (formal testing to prove reliability). So "one scalable architecture" is the plan, not yet the proof.

• What breaks if no one buys it

• TRL-9 can only be reached by flying on real customer missions.
• Without a first buyer, a qualified engine stays on the shelf, and the loan cannot be repaid from sales.

10. One Firm Funded From a Field of Several

• Manastu is not India's only hydrogen peroxide thruster maker
• On the same POEM-4 flight, Bellatrix Aerospace (Bengaluru) flew RUDRA 1.0 HPGP, a High-Performance Green Propulsion system [6].
• It gave 1 N thrust with a specific impulse of 220 seconds [6]. Specific impulse measures how much push a propellant gives per unit of fuel; higher is better.

• ISRO's own Space Technology Cells (ISRO-funded research units in academic institutions) have also worked on green propellant mixes for space thrusters [7].

• Why this matters

• Two Indian startups showed rival green thrusters in orbit on the same mission [6]. Public support to one of them can shape who wins the domestic market.
• This is not wrong in itself. TDB's job under the 1995 Act is to finance firms that develop indigenous technology [4].

• But it makes clear rules important. The question to ask is whether rivals can apply to the same window on the same terms.

• A strength hidden here

• Having two private firms with flight heritage means India is not depending on a single supplier for green propulsion.
• That supports the release's goal of cutting reliance on foreign technology [1].

11. Has TDB Promised More Than It Has Received?

• TDB's approvals are larger than the money released to it
• A PIB Parliament reply says TDB has approved 22 projects with total cost ₹4,744 crore and RDI support of ₹2,192 crore [3].
• TDB was sanctioned ₹1,000 crore. Only ₹500 crore had reached it by March 2026 [3].

• So approved support is about twice the sanction and about four times the cash released.

• Why this may still be fine, and what would make it a problem

• Deep-tech loans are usually paid out in tranches (instalments tied to milestones) over several years. Not all ₹2,192 crore is needed at once.
• The risk is timing. If the next release from the ANRF Special Purpose Fund is late, milestone payments to firms like Manastu could stall mid-project [2][3].

• For a startup, a payment that stalls during flight qualification can stop the whole programme.

• Only two fund managers so far

• TDB and BIRAC are the first Second-Level Fund Managers. The call for more closed on 31 January 2026, and selection was still underway [3].
• Until more managers are chosen, most non-biotech deep-tech money must pass through one body, TDB.

12. What Would Turn This Loan Into a Working Industry

• ISRO and IN-SPACe should give green thrusters a first customer
• POEM already gives startups free or low-cost flight slots for demonstrations. Both Manastu and Bellatrix used it [6].

• The next step is to fly these thrusters on real ISRO or government satellites. That is the only route to TRL-9 [1].

• TDB should link each payment to a public milestone

• The project has clear stages: engineering, integration, testing, validation [1].

• Publishing which stage unlocks which tranche would show whether unsecured public money is being used well [2][3].

• DST/ANRF should match releases to approvals

• The gap between ₹2,192 crore approved and ₹500 crore disbursed should be closed on a planned schedule [3].

• Choosing more Second-Level Fund Managers would spread the load beyond TDB [3].

• Keep the door open to rivals

• Other green-propulsion firms such as Bellatrix should be able to apply to TDB's RDI window on the same terms [6].
• This keeps competition alive, which is what lowers launch and satellite costs over time.

13. Anchors for Answers

• Data: TDB has approved 22 RDI projects, with total cost ₹4,744 crore and RDI support of ₹2,192 crore, against ₹1,000 crore sanctioned and ₹500 crore disbursed by March 2026 [3]
• Data: Bellatrix's RUDRA 1.0 HPGP gave 1 N thrust and 220 s specific impulse on POEM-4, a benchmark for Indian green thrusters [6]
• Law/Case: Technology Development Board Act, 1995 (Act 44 of 1995) lets TDB give equity or other finance for indigenous technology [4]
• Scheme: ISRO's POEM (PSLV Orbital Experimental Module) gave Manastu's VYOM-2U its first in-orbit demonstration; it is the bridge from prototype to flight heritage [6]
• Scheme: The RDI Scheme gives collateral-free, long-tenor loans or equity, no grants, and funds at most 50% of project cost [2][3]

14. Mains Relevance

• GS-III: Science & Technology, specifically "Awareness in the fields of space…", "Indigenization of technology and developing new technology", and "Achievements of Indians in S&T".
• GS-III: Indian Economy, specifically "Investment models" and mobilisation of resources (debt and equity financing of R&D).
• GS-II (secondary): Government policies and interventions for development (design of the RDI Scheme).
• Possible question stems: 1. India's R&D financing is shifting from grants to patient capital. Examine the design of the RDI Scheme and its potential to bridge the TRL 'valley of death' for deep-tech startups. 2. Discuss the significance of indigenous green propulsion technologies for India's space economy and strategic autonomy. 3. Private participation is reshaping India's space sector. Evaluate the role of state-backed financing institutions such as the Technology Development Board in this transition.

15. Related Topics to Study Next

• Anusandhan National Research Foundation (ANRF): it houses the RDI Fund's Special Purpose Fund.
• RDI Scheme and the Deep-Tech Fund of Funds: the parent financing framework and its equity channel.
• BIRAC: the other early RDI fund manager, focused on biotech; useful for comparison.
• Indian Space Policy 2023, IN-SPACe and NSIL: the regulatory and commercial setting for private space firms.
• Satellite propulsion types: chemical (monopropellant, bipropellant), electric, and green monopropellants; the technical basis for this project.
• Technology Readiness Levels: the maturity framework used by RDI eligibility rules and by project milestones.
• TDB Act, 1995 and the Fund for Technology Development and Application: the statutory basis for TDB's funding role.

16. NCERT Concepts to Revise

• Deep-tech startup (Economy): Manastu is a deep-tech space startup; long R&D gestation explains why it needs patient state financing.
• Venture capital (Economy): The note contrasts private venture capital, which avoids long flight-testing stretches, with state-backed RDI equity and loans.
• Collateral (Economy): RDI loans are unsecured, so TDB has no asset to claim if the firm fails.
• Fund of funds (Economy): The RDI Scheme routes money through fund managers and a Deep-Tech Fund of Funds, not directly from ministries.
• Space economy (Economy): The project aims to cut costs and build domestic capability in satellites and launch services.
• Self-reliance (Economy): The project aims to reduce dependence on foreign propulsion technology in the space value chain.

17. Common Errors / Trap Areas

• Wrong parent body: TDB belongs to DST, not ISRO, the Department of Space or IN-SPACe. [1]
• Grant vs. debt: the support is Optionally Convertible Debt, and the RDI Scheme gives no grants. [1][3]
• Mixing up amounts: ₹116 crore is the TDB support; ₹277.63 crore is the total project cost. [1]
• Mixing up TRLs: RDI eligibility starts at TRL-4, while this project starts at TRL-6 and aims for TRL-9. [1][2]
• Propellant: it is a hydrogen peroxide-based propellant. It is not hydrazine-based, and it is not ammonium dinitramide (ADN) or hydroxylammonium nitrate (HAN) based. [1]