Opening space programmes to private players is a breakthrough act and the world is watching keenly to see how feasible it will be to set up shop here

With the Government of India opening up ‘Space’, the private sector is all set for their time under the sun. For over five decades, ISRO has been the mainstay for all space related activities under the Department of Space (DOS) which is directly overseen by the Prime Minister. It has to its credit various successful missions from being the world first space agency to find water on the moon to having the world’s largest constellation of remote-sensing satellites and two satellite navigation systems namely, GAGAN and NAVIC.

Currently the Indian Space industry accounts for a mere $7 billion in the rising $360-billion global space market. Despite its huge and undisputed achievements, ISRO, by its own admission, has been falling short in meeting the ever-increasing demands for space-based applications and services within India.  Almost every sector starting from agriculture, fishing, transport, weather department, oil and gas, and urban development are dependent on space and satellite technologies for their businesses.

The move to open India’s space programmes to private players is a breakthrough act and the world is watching keenly to see how feasible it will be for them to come in with their facilities and services and set up shop here. The private industry, which was unable to compete due to their limited roles earlier, can now participate in the entire gamut of space activitiesnot just as a vendor but as partners. ISRO infrastructure, scientific and technical resources, and even data for space programmes are accessible to the private industry. The Indian National Space Promotion and Authorization Cente (IN-SPACe) is set to act as a facilitator and a regulator; it will be an interface between ISRO and private players to facilitate the best use of resources.

The space start-up segment in India looks vibrant and is doing extraordinary work in upstream, in-orbit and downstream segments. A multitude of private players and young start-ups encouraged with new age investors having a better risk appetite and patience for projects with long gestation period, are setting up ventures from launch facilities, satellite thrusters, mm Wave and optical communication Links, Satellite manufacturing, earth observation applications, Space Situational Awareness (SSA), Collision detection, Debris mitigation and de-orbiting et cetera.

The entry of large organisations has enabled start-ups and MSMEs to play a critical role in the value chain. Currently, there are around 500 firms directly and indirectly engaged with space technologies and a score of start-ups are engaged with the Government.

As a nation India has immense entrepreneurial spirit which has never been more pronounced than the recent difficult times of pandemic and with youngest sets of founders creating disruptive technology and business models in the field of micro-satellites, advanced rocket propulsion, launch vehicles, AI, Robotics, deep intelligence, etc., this segment is ready to find its wings given the right conditions. However, despite having 60 years of experience and expertise in space missions and satellite communications, India lacks on many fronts.

The start-ups lack resources and technology to handle independent space programmes. And even though the private sector firms can now use ISRO’s infrastructure and resources, there is no clarity on the processes involved, the time frame for the sanctions and permissions etc. An easier facilitation center to deal and help the Start-ups in a time bound manner will go a long way in helping in this.

Lack of enabling policies makes the start-ups move to other geographies to set shop -- regulatory and financial barriers create uncertainty for young businesses which is detrimental in this large-investment and slow ROI segment. These barriers force the young entrepreneurs to look for environment that offers easier prospects.

Access to satellite spectrum is a basic issue across the industry and is a critical to the success of this segment. Presently there is no clarity on the availability of satcom spectrum. Without policy level certainty on spectrum allocation the young start-ups will find it very difficult to conduct routine telemetry, telecommand and payload data operations.

There are three distinct authorisations/licenses that are required, viz., GMPCS, VSAT, INSAT MSS and the license categories under the Universal Licensing do notoffer any clarity for satellite services for the business in the upstream and downstream sectors. It is time for India to consider start-up-friendly licensing regime like the short-term experimental licensing by ISRO for their tie ups with the Universities for their Satellite Missions.

The Department of Space’s current combined role as licensor, market regulator and satellite operator, is causing a conflict of interest with private satellite builders and satcom service providers. Further there is DOT, DOS, WPC, INSPACE, and NSIL creating multiple layers permissions and asks, hampering the ease of doing business scenario for the sector. A clear delineation of functions is necessary for the commercial units to not seek places elsewhere to start their entity.

The new rules allow foreign companies to set-up facilities in India and enables 100 per cent FDI in the space sector which is a positive move and could give rise to several joint ventures. This paves the way for collaborative development of satellites, huge investment, job creation leading to enhanced GDP growth.

Currently, too many layers of taxes at various levels including GST, revenue share, multiple DOT, DOS charges and withholding tax, etc., has led to almost one third of the entrepreneurs actively looking at relocating out of India to reduce compliance and tax burdens. Countries like Singapore, Hong Kong and Malaysia offer a far more structured and rationalised tax structure than India and it makes more business sense for the entrepreneurs to shift base there.

There are several accelerator programmes run by the Government to promote the start-up ecosystem. India is the third largest start-up ecosystem in the world after the US and China and this is one more chance for the segment to grab their chance at succeeding.

There are challenges ahead, there is no doubt. India has 140 incubators and accelerators compared to China and the US which have over 2,400 and 1,500 incubators and accelerators, respectively. There is an urgent need to simplify regulation around registrations, bankruptcy laws, grants, investments etc to get entrepreneurs back into the system.

ISRO and the Government have a crucial role to play in resolving the policy gaps and loopholes by assuring the star-tups and private sector of a lucrative market for their products and services. A large-scale market opportunity awaits the private players in the upstream sector to engage in the manufacturing design and development of high-tech spacecrafts and in proliferation of the satcom applications in downstream sector. Regulators and relevant authorities need to work closely with emerging start-ups to bring about much needed reforms and incentives that allow industry to operate locally for the country to benefit from their success. 

Space is a global phenomenon and India must not allow itself to miss the opportunity to be at the top of this frontier. Policies must be harmonised with the global best practices. Developments and standards need to be on par with the rest of the world.

The industryhas the wherewithal to grow and contribute significantly both in terms of technological development and GDP growth, thus becoming a true partner to the Government on India’s journey towards space and beyond.

(The writer is Director General, Satcom Industry Association. The views expressed are personal.)