Now India can hope to have its own SpaceX and Blue Origin :-ET

 

Elon Musk's SpaceX and Jeff Bezos' Blue Origin dominate the space industry discourse in the world. From reusable rockets to space tourism, these companies are at the forefront of the global space industry. In India, the space industry has largely been confined to the public sector. But now that is all set to change.

Two recent events can make one believe that India too can hope to have its own SpaceX and Blue Origin in future. Two days after it was forced to call off the launch of its Agnibaan’s “SubOrbital Technological Demonstrator or SOrTeD” mission, spacetech startup Agnikul Cosmos on Thursday carried out a successful mission.

Agnikul's mission achieved three milestones: Demonstrating India’s first launch from a private launchpad (Agnikul Launch Pad in Sriharikota named Dhanush); showcasing the country’s first semi-cryogenic engine-powered rocket launch; and utilising the first single-piece 3D-printed engine designed and built domestically to power a launch vehicle.

Last month, India’s first military-grade spy satellite manufactured in the private sector, by Tata Advanced Systems Limited (TASL), was successfully deployed into space. A wholly owned subsidiary of Tata Sons, TASL is a significant player for aerospace and defence solutions in India.

More and more private companies in India, from small startups to those owned by big conglomerates, are now zooming into the space business. The number of space start-ups has gone up from just 1 in 2014 to 189 in 2023, as per government data. The investment in Indian space start-ups increased to $124.7 million in 2023.

The current size of the Indian space economy is estimated at $8.4 billion (around 2-3% of global space economy) and it is expected to reach $44 billion by 2033. The central role in this growth will be played by the private sector as the government has taken a number of steps to encourage participation of the private companies in the space sector. It is expected that the private sector will independently take up end-to-end solutions in satellite manufacturing, launch vehicle manufacturing, satellite services and manufacturing of ground systems.

Opening up space to the private sector

In May last year, a rocket developed after years of efforts by hundreds of Isro scientists was made available for private companies. The Indian National Space Promotion and Authorisation Centre (IN-SPACe) issued an expression of interest for transfer of technology of the small satellite launch vehicle (SSLV) to Indian private players. Isro had flown the SSLV twice and the second mission was a success. It is a three-stage solid launch vehicle capable of carrying a payload of up to 500kg in a low-Earth orbit.

Ever since opening of the space sector to private firms in 2020, the government has been intent upon sharing technology with them. The transfer of the SSLV tech to the private sector will enable Indian companies to grab a significant share of the expanding global satellite launch market by offering services at a lower cost.

In April last year, the Union Cabinet approved Indian Space Policy 2023 which aims to encourage private investment in the space sector. The policy authorises IN-SPACe, India's space regulator, to act as the single-window agency for clearance of space activities by government entities as well as non-government entities.

The government actually opened up the space sector to private entities three years ago, but it had played a limited role. The new policy allows the private sector in every stage of space programmes. "The single takeaway from the new policy is that nothing is off limits to the private sector. They can work on technologies, create infrastructure, develop launch vehicles, launch satellites with payloads for communication, navigation, earth observation (EO)... there is no constraint put on the private sector," IN-SPACe Chairman Pawan Goenka had told ET last year.

Since the space sector holds great strategic and security importance, any space activity must be authorised by IN-SPACe, whether it is government or private. While ensuring India's strategic or security interests are not compromised, it allows private entities across various categories and functions.

The new policy means approvals come easier, stakeholders are aligned with each other, and there are more private industry veterans in government helping the sector. Goenka himself is an auto-industry veteran, a former MD of Mahindra and Mahindra Limited and chairman of SsangYong Motor Company in Korea.

Traditionally, big private companies such as Godrej & Boyce and Larsen & Toubro have been working with Isro. However, the new policy institutionalises the Isro-industry relationship.

Allowing FDI in space

The government gave another boost to the private sector by allowing foreign direct investment (FDI) in space in February this year.

Allowing FDI in the space sector will help fuel the efforts of the startup ecosystem in launch vehicles, satellite manufacturing, and assembly segment. The move would help Indian companies integrate well into global space sector supply chains and enable innovation.

FDI in the space sector was earlier allowed up to 100 per cent in the area of satellite establishment and operations through government route only. The government changed the policy to allow up to 74 per cent FDI under automatic route in satellite-manufacturing and operation, satellite data products, and ground and user segments. Beyond this limit, government approval will be required in these areas for FDI.

Up to 49 per cent FDI is allowed through the automatic route for launch vehicles and associated systems or subsystems, the creation of spaceports for launching and receiving spacecraft. Beyond 49 per cent, FDI in these activities would require government approval, it added. Further, up to 100 per cent overseas investments are permitted under the automatic route for manufacturing of components and systems/sub-systems for satellites, ground, and user segments.

Sreeram Ananthasayanam, Partner, Digital Govt and Space Tech Leader, Deloitte, had said that this amendment is also expected to give a fillip to the burgeoning downstream/user segment of the space sector value chain which leverages India's natural talent in IT/analytics and needs of the growing economy of our country. "The policy will definitely help and further fuel the efforts of our nascent start-up ecosystem in launch vehicles, satellite manufacturing and assembly, and downstream application development," he said.