Private participation in Indian Space Sector
2022 NOV 16
Science and Technology > Space technology > Innovation and New technologies
- Vikram-S, India's first privately developed rocket is set to launch from the Indian Space Research Organisation (ISRO)'s launchpad at Sriharikota soon.
PRIVATE SECTOR IN INDIAN SPACE PROGRAMME:
- India is the sixth-largest player in the industry internationally having 3.6% of the world’s space-tech companies (as of 2021).
- Antrix Corporation Limited:
- ACL was established in 1992 as a marketing arm of ISRO for promotion and commercial exploitation of space products, technical consultancy services and transfer of technologies developed by ISRO.
- New Space India Limited (NSIL):
- NSIL was set up in 2019 to scale up industry participation in Indian space programmes.
- It is mandated to transfer the matured technologies developed by the ISRO to Indian industries.
- Indian National Space Promotion and Authorisation Centre (IN-SPACe):
- It will be the nodal national entity to drive building of satellites, rockets, or launch services through Indian industry.
- As an oversight and regulatory body, it is responsible for devising mechanisms to offer sharing of technology, expertise, and facilities to promote non-government private entities (NGPEs).
- ISRO has also built a strong association with the industry, particularly with Public Sector Undertakings (PSUs) like Hindustan Aeronautics Limited, Mishra Dhatu Nigam Limited and Bharat Electronics Limited and large private sector entities like Larsen and Toubro and Godrej.
WHY ENCOURAGE PRIVATE SECTOR:
- Generate revenue:
- Through its commercial arms, ISRO has earned USD 279 million in foreign exchange by launching satellites for 34 countries. The involvement of private sector can increase the forex earnings.
- Reduce cost:
- The involvement of private entities will help bring down the cost of space technologies and missions.
- Eg: The launch cost for the Ariane V rocket (owned by the European space agency) is around USD240 million, while the same for SpaceX’s Falcon 9 is only USD60 million.
- Improve competitiveness:
- In some areas, space-based systems are losing out to aero or terrestrial services. Eg: Google’s ‘Project Loon’, Facebook’s Aquilla project and the rising use of drones for surveillance are indications of satellite technology losing its edge. Hence, competing industries are essential to reduce cost and keep the sector competitive.
- Encourage innovation:
- Multiple players in the sector can propel the development of composite materials, reusable launch vehicles and semi-cryogenic engines for space applications in India.
- Industrial development:
- The involvement of private entities, especially small and medium industries, will trigger entrepreneurship and the development of an array of industries focused on developing cutting edge technologies to cater for space industries.
- Social benefits:
- Private players could lead to the expansion of space-based technologies into the unserved and underserved areas. This can benefit faster communication technologies, telemedicine facilities, digital education etc.
- Also, once private players take the lead in space sciences, government can divert funds intended for space science into other areas such as health and education.
- Potential investment opportunities:
- Space offers new areas of investment in the form of Space tourism, resource extraction etc.
- Eg: Asteroid mining has the potential to generate economic returns through extracting resources from Near-Earth asteroids, making it a lucrative business for private investors and business professionals to pursue.
- Strategic benefits:
- Space is slowly yet steadily becoming the next front in warfare. For eg: USA has decided to develop its own space force. Also, space technologies are becoming a fundamental part of defence technologies, in the form of quantum-encrypted communication and advanced air defence systems. Hence, having a strong presence in space will be strategically vital for countries in the coming years.
ADVANTAGES OF INDIAN SPACE SECTOR:
- Growth potential:
- The global space economy is currently valued at about USD 360 billion. However, India accounts for only about 2% of the space economy but aspires to grow to USD 50 billion by 2024. Hence, there is immense growth potential in the sector.
- Reliable history:
- ISRO has established itself as formidable figure in the international space forum. Hence, it can act as a foundation upon which private sector can explore its opportunities.
- Indigenous capabilities:
- India has a reliable cadre of launch vehicles, ranging from the small satellite launch vehicle (SSLV) to the heavy duty GSLVs. It has also expanded researches into reusable launch vehicles and crew modules, which are vital for future interplanetary missions.
- Cost effectiveness:
- Indian space technology is one of the cheapest, yet most reliable in the world. Thus, it offers an attractive market for customers, especially small nations, industries and universities.
- Favourable demography:
- The country has a strong population of technical educated English-speaking youth, who can potentially become the workforce for space-based industries across the world.
- Favourable government policies:
- As part of the AatmaNirbhar Bharat Package, the government had decided to enhance private partnership in the space sector.
- The government has also adopted favourable investment policies, like opening up sectors for foreign investment, easing up resolution process and codifying the multitude of labour and industrial laws.
- Good foreign relations:
- India has cordial relations with all major developing countries. This factor, along with the technological advances, reliability and cost effectiveness of Indian programmes make India an attractive destination for budding Industries.
CHALLENGES FOR PRIVATE ENTITIES:
- Access to capital:
- There are but only few institutions in India capable of long-term capital lending, which is crucial for an industry to develop.
- Also, existing regulations such as the Remote Sensing Data Policy do not emphasis on attracting foreign investments into the sector.
- Legislative barriers:
- There is no comprehensive or specific law regarding space exploration in India.
- Information barrier:
- Space related research and development is largely centred around the ISRO and the amount of information on space technologies available in the public sphere is limited. This hinders the development of indigenous space start-ups.
- Technological barriers:
- Many of the developments, like reusable vehicles, are still in the development phase. Also, India lacks Heavy-lift launch vehicles (Vehicles with payload capacity of 20-50 tonnes) vital for the launch of next generation heavy satellites and interplanetary missions.
- Lack of self-sustaining market:
- Commercial space sector is still a nascent field and the only dominant customer is the government. Hence, government involvement will continue to be a crucial factor for the success of the commercial exploits.
- Post-COVID economic slowdown:
- Following the pandemic, the world has gone into an economic slowdown. This inhibits investments into relatively new sectors such as commercial space industries.
- To bring the ideas behind AatmaNirbhar Bharat to reality requires a major overhaul of government led Space activities. A space law for India is needed to encourage a vibrant space industry within the country and facilitate India’s growing share in the global space economy.
- Demand for space-based services in India is far greater than what ISRO can supply. Hence, Private sector investment is critical, for which a suitable policy environment needs to be created.
- These policies should have a vision to develop an ecosystem that will encourage and enable SMEs as well as entrepreneurs to develop end-to-end products and services that are globally scalable.
- With the Ministry of Defence now setting up a Defence Space Agency and a Defence Space Research Organisation, ISRO should actively embrace an exclusively civilian identity.
Q. Enhancing private sector partnership is vital for India to stay competitive in the space industry. Discuss.