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Unlocking India’s Vast Potential To Be A Leading Player In World’s Space Sector

By Girish Linganna

Expansion of the nation’s space industry and the promotion of innovation have been driven by deregulation and incentivization; however, there is still a significant amount of work to be done in order to guarantee the commercial sustainability of creating a worldwide space hub. Recently, a significant amount of attention has been drawn to India’s space industry due to the establishment of the Indian National Space Promotion and Authorization Center (IN-SPACe). This action demonstrates the government’s desire and drive to involve private entities in the space sector.

The Indian space sector was valued at USD 9.6 billion in 2020 and contributes 2%-3% of the global space economy. The size of the sector is expected to reach USD 13 billion by 2025 and, by 2030, India further aims to capture a larger share of close to 10% of the global economy, according to the National Investment Promotion and Facilitation Agency.

According to a recent interview by Pawan Kumar Goenka, who serves as Chairman of IN-SPACe, more than 100 space startups have appeared in India during the past 24 months. New Space India Limited (NSIL) recently transferred the responsibility of producing Polar Satellite Launch Vehicles (PSLVs) to a consortium led by HAL and L&T. The aim is to build five rockets in the next four years at an estimated cost of INR 860 crore—a significant support for this goal.

Several startups, including Pixxel, Dhruva Space and Space Kidz India, have launched their satellites. Recently, Skyroot Aerospace achieved success by launching its first suborbital rocket. All these startups are making significant strides in the space industry.

Although the government aims at increasing its market share, certain essential factors must be addressed for India to emerge as a significant space exporter. This can only be accomplished by leveraging the skills, resources and expertise established over several years.

Governments have played a crucial role in providing successful space industry ecosystems worldwide by being the initial customers of high-risk products or services. This approach helps develop and mature these products or services, allowing them to expand into foreign markets in future. The Indian government, too, should establish methods to become a primary customer for innovative products or services the industry plans to create. This approach can help the private sector mitigate risks in investing in such areas. In case the product or service is successful, it can expand quickly to a global audience.

To address the increasing demand for satellite imagery in the country, one solution is for a company to act as the main customer and purchase 50% of the imagery produced at a resolution of 1m. This move can encourage the industry to compete and take on the challenge of developing such capabilities locally. If successful, the Indian industry can utilize the product for export of both satellites and imagery-based services.

At present, the Indian government is taking significant steps to establish regulatory structures through the establishment of IN-SPACe. Nevertheless, to fully implement reforms, it is imperative to involve the private sector by expanding the demand for space-related services across different ministries and departments. If the private sector is exposed to the demand for space-based services beyond just outsourcing rockets or manufacturing satellites, it could result in the speedy digital transformation of various sectors, such as agriculture, water management, infrastructure, fisheries, and so on. This transformation, in turn, can significantly enhance the quality of life of citizens at a fundamental level.

One way to achieve this goal is to coordinate with different government ministries and departments. The Indian Space Research Organization (ISRO) could serve as a project management hub to oversee targeted initiatives with private companies competing to meet the requirements.

The Department of Space (DoS) still governs IN-SPACe, the organization established by the Indian government to encourage and oversee the space industry, as it lacks the necessary legal framework to operate independently. For IN-SPACe to become a legitimate regulator, the government must give it a separate legislative mandate that is not under the control of the DoS. This would allow it to operate independently as a genuine regulator, free from any influence from ISRO or DoS.

The Telecom Regulatory Authority of India (TRAI) believes that implementing an IN-SPACe Bill alongside legislative changes can accelerate the pace of reforms and increase confidence among foreign investors interested in collaborating with the Indian space industry. The ultimate goal is to establish a streamlined regulatory process that eliminates the need for clearance from the Space Commission, DoS, or the Cabinet, and grant IN-SPACe the authority to take regulatory decisions regarding space activities within its scope.

Advanced countries’ governments have been aiding their space agencies by regularly revamping their procurement procedures, which involves developing methods for risk distribution and promoting the advancement of essential technologies for innovative offerings. An instance of the US government lending support to the National Aeronautics and Space Administration (NASA) is through the implementation of specific procurement reforms known as the NASA Space Act Agreement.

NASA has been given the ability to engage in contracts, leases and other transactions as needed to carry out its work, with the freedom to determine the terms of such agreements. This authority has allowed NASA to create unique procurement initiatives, such as Commercial Orbital Transportation Services (COTS) and Commercial Crew Development (CCDev), which have had a significant impact on such companies as SpaceX.

US defence establishments, such as the Space Force, use Indefinite Delivery Indefinite Quantity (IDIQ) contracts to procure assistance for immature technology products until they are fully developed and prove useful. This is an interesting example of how IDIQ contracts are utilized.

To promote the development of new technologies with commercial potential and increase exports, the Indian government must implement procurement reforms that encourage risk-taking and support research and development/intellectual property development by both small- and medium-size enterprises, as well as startups, in the relevant sectors. The Indian government should implement procurement reforms that facilitate inventive risk-taking to aid private sector research and development and intellectual property development in commercially viable areas.

No comprehensive study has been conducted to map real indices, such as how many people are employed in India’s space sector, the country’s share of exports in space-related services, or Foreign Direct Investment (FDI) in space research and procurement.

The Promotion Directorate of IN-SPACe requires a dedicated department that can oversee the micro- and macro-economic aspects of space-related activities. This department can comprise experts from various fields, such as technology, economics and social sciences, who can collaborate to develop a consistent monitoring system to track the growth of space activities in the nation.

The aforementioned plan can also act as a blueprint for evaluating yearly progress and using the resulting data as the primary basis for implementing evidence-based policy modifications. Key performance indicators, such as FDI, employment opportunities generated, total export value in US dollars and others, can be chosen to propel industry growth. It is possible to monitor these factors and conduct research on other indicators, such as improvements in air and water quality and crop yields, as well as a decrease in carbon emissions.

Over many years, policies have been created based on subjective information. It is important to shift towards utilizing concrete frameworks that incorporate economic and social measurements to guide policies and promote growth in the space industry in future.

Some of the most promising downstream application companies are emerging in India, thanks to the country’s skilled software workforce.

Such companies as SatSure, Vassar Labs, CropIn, Aquaconnect, and so forth are good instances of how Indian entrepreneurs leverage a blend of space and software to build products that cater not just to businesses, but also to communities. They have the potential for creating a tremendous societal impact on other developing countries, as well.

India’s emerging solutions for addressing problems, cultural differences and affordability issues in various geographies, such as South Asia, Africa and Latin America are more relevant than the solutions offered by traditional space powers in the West. The challenges faced by these regions are better understood by India, leading to more practical and cost-effective solutions.

To promote localized adaptation, it is crucial to establish connections between solutions developed in India and other developing regions. IN-SPACe can facilitate the growth of these solutions by coordinating with India’s foreign missions. The key is to find partners who can work with Indian industries to extend the benefits to their respective communities. This approach will eventually increase the export of space-related products and services from India.

One way to begin would be to organize trade delegations focused on specific themes, where the Indian industry is supported in networking directly with foreign partners. To fully utilize the untapped potential of a country, it is necessary to address all the dimensions mentioned above in a focused and independent manner. This approach will help to expedite the growth of the sector. We should hope that those in charge of taking decisions are paying attention and take action to unlock the vast potential that the nation possesses. (IPA Service)

** The author is an aerospace expert and a defence analyst.

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