Daily Editorial Analysis

Private sector investment in India’s space industry (GS Paper 3, Science and Tech)

Context:

·         The Union Government would soon come up with a new space policy that could initiate the rise of India’s own “SpaceX-like ventures”. The proposed move would increase private sector participation in the industry.

Why is development in the space sector important?

·         Enhancing space technology would be beneficial to bolster connectivity and combat climate-related implications through a more secure and effective means.

·         Satellites provide more accurate information on weather forecasts and assess (and record) long-term trends in the climate and habitability of a region.

·         For example, by monitoring the long-term impact of climate change at regional, territorial, and national scales, governments would be able to devise more pragmatic and combative plans of action for farmers and dependent industries.

·         Additionally, they can also serve as real-time monitoring and early-warning solutions against natural disasters such as earthquakes, tsunamis, floods, wildfires, mining etc. Real-time tracking can also serve multiple purposes in defence.

Satellite Communication:

·         As for connectivity, satellite communication can reach more remote areas where conventional networks would require a heavy complimenting infrastructure. Additionally, as to reliability, the World Economic Forum had stated that satellite communication can help connect 49% of the world’s unconnected population.

·         In this light, it must be noted that satellite communications, which are used to facilitate telecommunication services, are among the major categories for investment in the space technology sector.

·         Other prominent categories include spacecraft and equipment manufacturing.

Where does India stand in the global space market?

·         As per SpaceTech Analytics, India is the sixth-largest player in the industry internationally having 3.6% of the world’s space-tech companies (as of 2021).

·         U.S. holds the leader’s spot housing 56.4% of all companies in the space-tech ecosystem. Other major players include U.K. (6.5%), Canada (5.3%), China (4.7%) and Germany (4.1%).

·         The Indian Space Industry was valued at $7 billion in 2019 and aspires to grow to $50 billion by 2024. The country’s standout feature is its cost-effectiveness.

·         India holds the distinction of being the first country to have reached the Mars’ orbit in its first attempt and at $75 million, way cheaper than Western standards.

·         Most companies in the sector, globally, are involved in manufacture of spacecraft equipment and satellite communications.

·         The 60-odd start-ups that had registered with the Indian Space Research Organisation (ISRO), a majority of them were dealing in projects related to space debris management. As space becomes more congested with satellites, the technology would thus help in managing ‘space junk’ (debris of old spacecraft and satellites).

Budgetary allocation:

·         U.S. and Canada were the highest receivers of space-related investment in 2021. A scrutiny of SpaceTech

·         Its space budget was $41 billion in 2021, $23.3 billion of which was focused on NASA. The spur in research and innovation driven by government-led spending could also be attributed to the global concentration of considerable number of private investors in the country.

·         India’s total budgetary allocation for FY2022-23 towards the Department of Space was ₹13,700 crore. Further, as per Tracxn data, funding into the sector’s start-ups (in India) nearly tripled to $67.2 million on a year-over-year basis in 2021.

How is the private sector’s involvement regulated in India?

·         In June 2020, the Union government announced reforms in the space sector enabling more private players to provide end-to-end services.

·         An announcement for the establishment of the Indian National Space Promotion and Authorisation Centre (IN-SPACe) was made. It was mandated the task of promoting, authorising and licensing private players to carry out space activities.

·         As an oversight and regulatory body, it is responsible for devising mechanisms to offer sharing of technology, expertise, and facilities free of cost (if feasible) to promote non-government private entities (NGPEs).

·         IN-SPACe’s Monitoring and Promotion Directorate oversees NGPE’s activities as per prescribed regulations and reports back in case any corrective actions or resolutions are required. ISRO shares its expertise in matters pertaining to quality and reliability protocols, documentations and testing procedure through IN-SPACe’s ‘interface mechanism’.

·         Additionally, constituted in March 2019, NewSpace India Ltd (NSIL), is mandated to transfer the matured technologies developed by the ISRO to Indian industries. All of them are under the purview of the Ministry of Defence.

Way Forward:

·         Private sector’s involvement in the long term, as with other commercial sectors, is believed to help spur investment and expertise in the realm which is capital-intensive and demands high technology.

·         The space sector reforms were made with the intention to provide a “level playing field” to private companies in satellites, launches and space-based services.