Rohan Atrawalkar and Janak Nabar
India’s space sector, according to PwC estimates is currently valued at USD 7 billion, which is around 2 percent of the global space economy. Recent reforms announced in 2020 are expected to provide an impetus to India’s space sector and see a much higher share in the global space economy by 2030. The reforms are intended to expand the role of the private sector and the public sector in commercial activity, especially geospatial services and Direct-To-Home (DTH) activity, as well as make the use of space assets more demand driven. The latter would include, for example, pushing for greater technology transfers of Polar Satellite Launch Vehicles (PSLV) and Small Satellite Launch Vehicles (SSLV) to the private sector.
Private sector involvement in India’s space sector had previously been largely limited to manufacturing of components. A survey by Dassault in 2020 of 281 Indian space equipment manufacturers and service providers showed that 75 percent of the firms were involved in Tier-2 and Tier-3 products and services that could be classified in the low-medium value add category.
The gradual opening up of the space sector has meant that the private sector will now find a greater role in production, integration and testing of components and subsystems involved in launch vehicles and spacecrafts. There is also potential for the private sector to be involved in ground operations of spacecrafts and develop space based applications using satellite data. Thus as opposed to the prior involvement in low value add manufacturing, private players would now be able to run end-to-end operations in areas mentioned above, and be involved in activities across the value chain. The timing of the opening up of the space sector has also coincided with a surge in the number of startups working on space related research and technologies. According to the 2022 Economic Survey, around 47 new startups were incorporated in the space sector in 2021 up from just 11 in 2019. As of 2021, there were around 100 startups working in the space sector, in diverse areas from satellite communications to development of environmentally sustainable propulsion fuels.
To facilitate a greater connect with the private sector, two key agencies will be involved in overseeing and implementing the space sector reforms announced in 2020 – the New Space India Limited (NSIL) and the Indian National Space Promotion and Authorization Center (IN-SPACe). NSIL is a PSU established in 2019 and will own and operate space assets like satellites and launch vehicles with the aim to provide commercial services. These space assets may be acquired from ISRO or the private sector. Some of the services it will provide include transponder capacity, imaging services and even launch services for customer satellites. Furthermore, NSIL will play an important role in marketing ISROs satellite development and launch capabilities as well as aid in the transfer of technology, in particular technology related to Polar Satellite Launch Vehicle (PSLV) and Small Satellite Launch Vehicle (SSLV) to private industry. A good example of the role of NSIL is evident in the contract between NSIL and Tata Sky, wherein a communications satellite GSAT24 is being developed by ISRO and will be procured by NSIL. This GSAT24 has been specially built entirely for use by Tata Sky and will be operated by NSIL. The launch of the satellite will be conducted by Arianespace, a French company. As can be seen from the example of Tata Sky, NSIL will be an aggregator of demand and a solution provider for space based requirements. IN-SPACe, on the other hand, is expected to play the role of a regulator and licensor to support the growth of Non-Government Private Enterprises (NGPEs) in the space sector. For instance, the Draft Spacecom Policy 2020 has mentioned IN-SPACe as the key agency that will approve licenses to private players to provide satellite based internet in India, while the Draft National Space Transportation Policy has said IN-SPACe will be the single nodal agency that will provide approvals for private players to build and operate launchpads as well as other space infrastructure. Separately, IN-SPACe is also expected to oversee the sharing of ISRO facilities, spacecraft data from ISRO and other space linked services offered through NSIL.
The reforms announced in the space sector and the creation of the NSIL and IN-SPACe to help oversee and implement these reforms is expected to see greater private sector involvement in the space sector. The private sector is now likely to be seen participating in activities across the value chain when it comes to the development of space assets and services. As seen earlier, a buzz has also been created in the startup ecosystem. The work of NSIL and IN-SPACe is also expected to help ease the burden with respect to commercial activities for ISRO’s scientists and allow them to focus on their research. Going forward, further reforms should perhaps focus on creating greater linkages with the Higher Education Institutions, including funding of research in the HEIs. The announcement in March 2021 of a partnership between ISRO and the Indian Institute of Space Science & Technology (IIST) where ISRO will provide funds to IIST for application oriented research projects of importance to ISRO, along the lines of the partnership between Caltech and the Jet Propulsion Laboratory in the US, is encouraging. The scope of research funding provided by ISRO should eventually be widened to include other institutes and departments of interest across the country. This would enable talent to emerge from these institutes and departments which could be readily absorbed by the startup ecosystem and the private sector.