Private Industry in Space Sector

General Studies Paper -3 

Context: The Chennai-based space start-up will launch its first rocket Agnibaan Sub Orbital Technology Demonstrator from the Satish Dhawan Space Centre in Sriharikota.

India’s share in Space Industry

• India constitutes 2-3% of the global space economy and is expected to enhance its share to more than 10% by 2030.
• With over 400private space companies, India ranks fifth globally in no. of space companies.

Private players in space industry

• Indian start-ups are taking active interest in the space market, from just 1 start-up in the space sector in 2012 to 189 start-ups in 2023. 
• The funding received by these start-ups reached a total of $124.7 Mn in 2023from $67.2 Mn in 2021.
• The Skyroot, have launched India’s first privately built rocket, Vikram-S, into space, with plans to revolutionize satellite launches.

Regulation of the Private sector in the Space industry in India

• National Space Promotion and Authorisation Centre (IN-SPACe):It is an autonomous and single window nodal agency in the Department of Space for the promotion, encouragement and regulation of space activities of both government and private entities.
• New Space India Ltd (NSIL):It 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.

Steps taken by Government

• SpaceTech Innovation Network (SpIN): SpIN is a one-of-its-kind public-private collaboration for start-ups and SMEs in the space industry.
• The Indian Space Policy 2023 was notified to implement the vision for unlocking India’s potential in the Space sector through enhanced private participation.
• Various schemes to encourage the private sector have been implemented by IN-SPACe, i.e., Seed Fund Scheme, Pricing Support Policy, Mentorship support, Design Lab for NGEs, Skill Development in Space Sector, ISRO facility utilization support, Technology Transfer to Non-Governmental Entities (NGEs).

FDI in space sector

• Under the amended FDI policy, 100% FDI is allowed in the space sector. The entry route for the various activities are as follows:
• Up to 74% under Automatic route:Satellites-Manufacturing & Operation, Satellite Data Products and Ground Segment & User Segment.
• Up to 49% under Automatic route: Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft.
• Up to 100% under Automatic route: Manufacturing of components and systems/ sub-systems for satellites, ground segment and user segment.

Significance of privatization of space sector

• Private companies operate with a profit motive, which drives them to reduced costsin space missions and satellite launches.
• Privatization introduces competition into the space industry, which can drive efficiency and innovation.
• Private players facilitate the commercialization of space applicationsand services for agriculture, disaster management, urban planning, navigation, and communication, among other sectors.
• private companies have a greater degree of autonomy in making decisions, which enables them to take up new projects.
• It helps to generate employment, enable modern technology absorption and make the sector self-reliant.

Challenges

• Space technology is expensive and needs heavy investment.  This kind of lucrative power is available only with selected rich corporates, thus can lead to monopolization of the sector. 
• Building and operating space technology and infrastructure require specialized technical expertise and resources.
• Protecting intellectual property rights (IPR)is crucial for incentivizing innovation and investment in the space sector.
• Indian private companies in the space sector have to face stiff competition from the established players such as SpaceX, Blue Origin etc in the international market.

Way Ahead

• Private entities are now actively involved in crucial aspects of research, manufacturing, and fabrication of rockets and satellites, fostering a vibrant ecosystem of innovation.  It is expected to integrate Indian companies into global value chains.
• With this, companies will be able to set up their manufacturing facilities within the country duly encouraging ‘Make In India (MII)’and ‘Atmanirbhar Bharat’ initiatives of the Government.