- The great space race of the 20th century was kicked off by the Soviet Union’s launch of Sputnik in 1957.
- It was a competition between the world’s great powers, a test of their ideologies, which proved to be a synecdoche of the entire Cold War between the capitalist United States and the socialist Soviet Union.
- The space race is on again, but this time, private players are on the power field to take the next leap for mankind and democratise space usage to build commercial value.
- This has huge implications for original equipment manufacturers (OEMs) in the space sector in India and is a promising venture for global investors.
INDIA’S SPACE SECTOR
- India currently stands on the cusp of building a space ecosystem and with ISRO being the guiding body, India can now evolve as a space start-up hub for the world.
- The sector is in the embryonic stage where the possibilities are limitless with a scope to build a feasible business model.
- Already 350 plus start-ups such as AgniKula Cosmos, Skyroot Technologies, Dhruva Space and Pixxel have established firm grounds for home-grown technologies with a practical unit of economics.
CHALLENGES TO TACKLE
A very marginal player
- Today, the space economy is a $440 billion global sector, with India having less than 2% share in the sector.
- This is despite the fact that India is a leading space-faring country with end-to-end capabilities to make satellites, develop augmented launch vehicles and deploy inter-planetary missions.
Low investment in space sector
- While total early-stage investments in space technologies in FY21 were $68 billion, India was in fourth place with investments in about 110 firms, totalling not more than $2 billion.
Extensive brain drain
- There has been an incidence of extensive brain drain in India, which has increased by 85% since 2005.
Bottlenecks in Policies:
- The extensive brain drain from India can be linked to the bottlenecks in policies which create hindrances for private space ventures and founders to attract investors, making it virtually non-feasible to operate in India.
- Currently, a report on a leading news portal says: the reason for the lack of independent private participation in space includes the absence of a framework to provide transparency and clarity in laws.
Issue of Liability
- Another crucial aspect of space law is insurance and indemnification clarity, particularly about who or which entity undertakes the liability in case of a mishap.
- In several western countries with an evolved private space industry, there is a cap on liability and the financial damages that need to be paid.
- In fact, space operators are required to hold insurance of up to AUD$100 million under Australian space law.
Competitive ecosystem due to domestic support
- Currently, many of the private entities are involved in equipment and frame manufacturing, with either outsourced specifications or leased licences.
- These companies have revolutionised the space sector by reducing costs and turnaround time with innovation and advanced technology.
- For such purposes, NASA and the CNSA award a part of their annual budget to private players.
- Until 2018, SpaceX was a part of 30 missions of NASA, getting over $12 billion under contract.
INDIA’S INITIATIVES TO CATCH UP THE RACE
- Last year, the Government of India created a new organisation known as IN-SPACe (Indian National Space Promotion and Authorisation Centre) which is a “single window nodal agency” established to boost the commercialisation of Indian space activities.
- It will act as a supplement to the Indian Space Research Organisation (ISRO), the agency promoting the entry of the Non-Government Private Entities (NGPEs) in the Indian space sector.
- It will also felicitate a swift on-boarding of private players in the sector through encouraging policies in a friendly regulatory environment and by creating synergies through already existing necessary facilities.
- To boost India’s space sector, investor confidence needs to be pumped up and for the same, clear laws need to be defined.
- The laws need to be broken down into multiple sections, each to address specific parts of the value chain and in accordance with the Outer Space Treaty (or the United Nations resolution, the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies).
- There is a need to provide a solid foundation to products and services developed by the non-governmental and private sectors within the value chain.
- Also, to create value, Indian space private companies need to generate their intellectual property for an independent product or service (e.g. satellite-based broadband).
- There needs to be a cap on liability and the financial damages that need to be paid. In several western countries with an evolved private space industry, such steps have already been taken.