The sector is in an embryonic stage and there is scope to build a feasible business model

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, A Very Marginal Player

Last year, according to a report, 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. A supplement to the Indian Space Research Organisation (ISRO), the agency promotes the entry of the Non-Government Private Entities (NGPEs) in the Indian space sector. The agency 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, the report says.

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. While total early-stage investments in space technologies in FY21 were $68 billion, India was on the fourth place with investments in about 110 firms, totalling not more than $2 billion.

The Hurdles

Another aspect to throw light on is the extensive brain drain in India, which has increased by 85% since 2005. This 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. 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). Dividing activities further into upstream and downstream space blocks will allow legislators to provide a solid foundation to products/services developed by the non-governmental and private sectors within the value chain, it adds.