Guarding against the temptation of statist developmental efforts in the space sector will be a key test for the government — and for ISRO’s scientific bureaucracy

by Kartik Bommakanti

The Modi government made a significant decision in May 2020 to permit private sector participation in the space industry. The key to realising the promise of Indian private enterprise involvement in the Indian space sector is avoiding the pitfalls that come with the Indian State’s proclivity to privilege ISRO’s monopoly over space science and space technology. To be sure, there has always been some level of private sector involvement in the space sector. For instance, companies such as Larsen and Toubro (L&T) and Walchandnagar industries have provided critical manufacturing support to ISRO’s Space Launch Vehicle (SLV) program. However, this private sector’s involvement has been through sub-contractual agreements with ISRO.

Indeed, recent claims that In-Space, ISRO’s and the Department of Space (DoS) regulator, may not end up creating a level-playing between various private sector companies, but may privilege a few enterprises over others is to some extent valid, but overstated. Rather, the concern should be over ISRO potentially monopolising space-related Research and Development (R&D) and production, rather than fostering true competition through its regulator In-Space. The risk of the Modi government’s initiative of liberating the space sector by lifting fetters on the private sector’s participation in a whole range of space activities will, if not out rightly be undone, be slowed down by ISRO’s bureaucratic interest in retaining a large chunk of space-related R&D and production work under its control.

Without competition, India’s defence industrial sector has tended to stagnate or produce very few gains for the Indian armed forces.

Thus, if ISRO and the Modi government are to make good on their endeavour to give the Indian space program more dynamism and efficiency by involving the Indian private industry, they will need to avoid the course successive Indian governments have taken with regards to Indian industry’s participation in the defence sector. Without competition, India’s defence industrial sector has tended to stagnate or produce very few gains for the Indian armed forces. Despite frequent pledges to do so, there is a substantial empirical record to show that governments have failed to live up to the commitment of creating a level playing field between the private sector and public sector in defence. Contracts for warship construction is a case in point where governments, including the current, have frequently privileged public sector shipyards as opposed to private sector shipyards.

To be sure, ISRO is not completely encumbered by the challenges and problems bedevilling the performance of India’s defence industry, such as poor product quality and weak and untimely delivery. One reason is principally is due to the level of autonomy the space agency has enjoyed and the latitude to work in accordance with stringent timelines for delivery. This is in part due to the nature of the tasks and the missions that ISRO has to fulfil as opposed to the State-run Defence Research and Development Organisation (DRDO) and its subsidiaries. After all, the late Chairman of ISRO U.R. Rao observed many years ago, “Any program or development of ISRO is not to compete with any country but for our requirement.” The statement is pregnant with the fact that neither time pressures nor pursuit of competitive advantage has constrained the ISRO. It has given the agency the latitude to pursue the development of the indigenous cryogenic upper stage at leisure and in the absence of competitive pressure. Nevertheless, there is a converse disadvantage in pursuing development over extended timelines. Take the cryogenic rocket program. It took ISRO years to successfully develop the cryogenic upper stage of the Geosynchronous Launch Vehicle (GSLV). Even so, it has not matched the advanced space-faring countries in developing a cryogenic engine that can consistently send payloads of over three tonnes to Geostationary orbit (GTO). Indeed, notwithstanding progress with the GSLV Mark III in sending 2-2.5 tonne payloads, the Indian space program is still dependent on Arianne rockets to launch its large communication satellites. Ultimately, ISRO has not been under enormous pressure to bring launch costs down for its heaviest payloads. Private sector involvement in rocket technology is an imperative for India. Take the case of the Falcon 9 rocket built by Space Exploration Technologies Corporation or Space X, a private company, which has broken the duopoly of Arianespace and United Alliance in the launch vehicle segment demonstrating clearly the importance of the private enterprise’s involvement and competition in successful launch vehicle development.

There is a converse disadvantage in pursuing development over extended timelines.

However, with the advent of private sector participation, the challenge for ISRO and the DoS will and should be as an enabler of fair competition and not simply as a regulator. Guarding against the temptation of statist developmental efforts in the space sector will be a key test for the Modi government’s and for ISRO’s scientific bureaucracy, if India is realise the full potential of private and commercial participation in the space sector in the coming decade. Unlike the cryogenic engine program, which has been exclusively an in-house R&D effort, the slew of other developmental initiatives that are underway will potentially benefit from private sector involvement, such as the Reusable Launch Vehicle (RLV) program, the Small Satellite Launch Vehicle (SSLV), which has already witnessed some start-ups conducting in-house development and satellite technology development.

If ISRO and the Modi government, including its successor follow through on their privatisation effort, there are enormous possibilities for the Indian space program and the space industry in general. India could witness a substantial boom for space science; technology and industry bringing dynamism in the form entrepreneurial energy and productivity over the course of the 2020s. Consequently, it could help overcome delays by expediting solutions to complex technical challenges, which hitherto, at least in some areas, have been the result of confining space science, technology and industry to a state-led undertaking. If India can limit its deeply entrenched statist instincts and let private sector participation thrive, it will also attract greater levels of foreign investment and capital flows from Venture Capitalists (VCs) and collaboration with overseas space start-ups and companies.