Privatisation in Space Industry : Opportunity – UPSC GS3

Evolution of Space Sector:
  • Space race 1.0:
    • The great space race of the 20th century started with the Soviet Union’s launch of Sputnik in 1957.
    • It reflected the Cold War agenda in the space field and a test of their ideologies.
  • Space race 2.0: This time, private players are taking the next leap for mankind and democratizing space usage to build commercial value.
Privatisation of the space sector in India?
  • India is a leading space-faring country, with end-to-end capabilities to make satellites, develop augmented launch vehicles and deploy interplanetary missions.
  • The total early-stage investments in space technologies in FY21 were $68 billion, India was in fourth place.
  • Already 350 plus start-ups such as AgniKul Cosmos, Skyroot Technologies, have established firm grounds for home-grown technologies with a practical sustainable business model.
  • Further, GOI recently created a new organisation-INSPACe (Indian National Space Promotion and Authorisation Centre)- as a supplement to the ISRO.
  • It is a single-window nodal agency established to boost the commercialization of Indian space activities. It will promote the entry of private entities through a friendly regulatory environment and by creating synergies through already existing necessary facilities.
What are the challenges faced by the Indian space sector?
  • Despite this achievement, though the space economy is a $440 billion global sector, India has less than 2% share in the sector.
  • In India, brain drain has increased by 85% since 2005 and thereby low private participation. This is due to:
    • Investor confidence: The hindrances faced by private space ventures to attract investors, making it virtually non-feasible to operate in India.
    • Lack of clarity in laws: The absence of a framework to provide transparency and clarity in laws is the reason for the lack of independent private participation in space.
    • Timelines not fixed: Due to the technicalities involved in the space business, timelines on licensing,   issuance of authorisation, and continuous supervision mechanism need to be defined into phases.
    • Lack of insurance and indemnification clarity in space law, particularly about who or which entity undertakes the liability in case of a mishap, creates challenges for a smooth rollout.
  • The private entities in this sector currently work on leased licenses from ISRO rather than having their own IP for a product.
Way Forward:
  • The laws need to be reformed and reframed into multiple sections, each to address specific parts of the value chain and in accordance with the Outer Space Treaty.
  • India can learn from France in license timelines where there are four obtainable licences in addition to case-by-case authorisation.
  • India can also learn from several western countries with an evolved private space industry, where there is a cap on liability and the financial damages that need to be paid.
  • The insurance provision can be brought in by the law. For example, in Australia space operators are required to hold insurance of up to AUD$100 million under Australian space law.
  • For independent existence, Indian space private companies need to generate their own IP for their product or services. With this, the market for them should also be not limited to ISRO. This will help open the door to global markets.
  • ISRO needs to go beyond taking small manufacturing support from private players and start involving them in complex operations. This will help both players by reducing costs and turnaround time with innovation and advanced technology.