Private Sector Participation in Space Activities

General Studies Paper -3

Context: New Space India Limited (NSIL), invited applications from private firms for “end-to-end” manufacturing of Launch Vehicle Mark-III or LVM3, the rocket that was used in the Chandrayaan-2 and Chandrayaan-3 lunar missions.

About space sector

• The Indian Space Sector was valued at $9.6 Bn in 2020, contributing 2%-3% of the global space economy.
• The size of the sector is expected to reach $13 Bn by 2025, and by 2030 India further aims to capture a larger share of close to 10% of the global economy.

Private Sector’s Participation

• India’s space sector has entered a new era of growth and innovation with the government’s decision to open up the sector to private enterprises.
  • This strategic move is aimed at boosting the development of the segment and increasing India’s share in the global space economy.
• The Department of Space (DOS) desires to encourage the participation of private companies in space activities.
• ISRO’s role has shifted from being the sole operator to becoming a facilitator for private sector growth.
  • The organisation is now focused on supporting private enterprises through technology transfer, sharing expertise, and providing access to infrastructure.
• The successful landing of Chandrayaan-3 on the moon’s south pole has acted as a catalyst, encouraging private sector investment in space.

Benefits

• Innovation and Competition: With private companies like Skyroot Aerospace making headlines for their achievements, the sector is poised for a surge in innovation and healthy competition1.
• Global Collaboration: The influx of FDI not only brings in capital but also fosters international collaborations, enhancing India’s global standing in space technology1.
• National Development: A strong space sector contributes to national development by improving connectivity, especially in remote areas, and aiding in disaster management and climate monitoring.
• Cost competitive: Promoting the private sector will enable the Indian space program to remain cost competitive within the global space market, and thus create several jobs in the space and other related sectors

Challenges

• Regulatory hurdles,
• Technology transfer complexities, and
• The need for a skilled workforce are some of the issues.

Governments steps

• In February, 2024, Centre amended its FDI policy, allowing up to 74% FDI for satellite manufacturing and operation, up to 49% FDI for launch vehicles, spaceports and associated systems and 100% FDI to manufacture components and systems/sub-systems for satellites, ground and user segments.
  • Beyond the above-mentioned limits investment is allowed in these segments via the government route.
• The investment in Indian Space Start-Ups has increased to $ 124.7 Million in 2023.
• In 2020, the Indian National Space Promotion and Authorisation Centre (IN-SPACe) was established to promote, authorise and supervise various space activities of non-governmental entities (NGEs).
  • IN-SPACe has been instrumental in facilitating the entry of private players into the space sector.
• In February 2021, Centre issued guidelines for private companies to acquire all geospatial data and maps from government agencies without licences, and permission or clearances for collection, use and dissemination, except certain categories.
• The Centre unveiled the National Geospatial Policy on December 28, 2022, laying down a framework for the development of a geospatial ecosystem, allowing democratisation of data and a strengthened integrated interface for all digital data that have location.
• The Indian Space Policy 2023: The Union Cabinet’s approval of the Indian Space Policy 2023 outlines the roles and responsibilities of key organisations like the Indian Space Research Organisation (ISRO), NewSpace India Limited (NSIL), and private sector entities, providing clarity and direction for future endeavours.

Conclusion

• The privatisation of the Indian space sector is a bold step towards harnessing the potential of private enterprises.
• There is a need to promote private sector activity in all high technology areas including space, to fully unlock the potential of India’s youth and entrepreneurs
• Therefore, it is necessary to enable private entities within the Indian space sector to establish themselves as independent players capable of end to-end space activities.
• With the government’s supportive policies and ISRO’s collaborative approach, India is poised to make significant strides in the global space industry.
• Addressing the existing issues will be crucial for sustaining the momentum and ensuring the long-term success of India’s privatised space sector.