22nd May – Private participation in space sector

Opening Up The Space

The government’s decision to allow the private sector to play a larger role in the country’s space activities is welcome.

How will it benefit the private sector?

  • Permission to use the facilities of the Indian Space Research Organisation (ISRO) will relieve companies of the burden of going overseas to test equipment, perform launches, and access geospatial data.
  • Apart from access to facilities, access to the ISRO team would be invaluable for any start-up. The government has also said that the repository of geospatial data from ISRO satellites will be made available to private firms, although strict guidelines would be followed in releasing this data due to its sensitivity.
  • The opening up of the sector will deepen those relationships and help to overcome manpower and budgetary constraints.
  • Modern communications systems, as well as geospatially-dependent businesses, including agricultural and environmental management, and road alignment, depend on space activities. Space exploration has led to huge advances in health care, weather prediction, and material sciences. The opening up of the sector could lead to a burst of investment.

Benefits for India’s space sector –

  • ISRO, which tenders out much of its equipment, will actively seek partnerships in projects across various areas.
  • The demand for satellite launches is growing. ISRO has estimated it must launch 15,000 satellites in the next six-nine years. It doesn’t have the manpower to do this and would require massive budgetary increases to build that capacity even though the satellite business represents a $30-billion opportunity. The private sector could help meet shortfalls without placing extra burden on the exchequer.
  • There has also been relatively little investment in space exploration. As of 2019, cumulative funding for 120 start-ups was estimated at just $6-7 million. More investment in space will have huge positive externalities.

Current partnerships –

Apart from space-focused start-ups, many established Indian firms are working with ISRO to develop and build space-related equipment. The agency tenders out components, though it does design in-house. Godrej and L&T, for example, are contracted with ISRO to build rocket systems, and by 2021, ISRO intends to completely tender out its Polar Satellite Launch Vehicle (PSLV) rocket systems to a consortium of companies, instead of sourcing parts from 200-odd suppliers and doing assembly, as is the current practice.

What needs to be done?

  • Legislation like the pending Space Activities Bill needs to be passed, however, before Indian companies can launch satellites.
  • A careful delineation of regulations to ensure consistency and predictability will be required to provide a level playing field for private players in satellite launches and space-based services.
  • New legislation defining commercial space-based activities will be needed — this is overdue anyway, given that the US and other nations have started to legally redefine such commercial activities.
  • This Bill will also need amendments to clarify eligibility criteria for licensing commercial activity. ISRO’s commercial arm, The New Space India Ltd, may also have to rethink its role to ensure that it becomes a more efficient interface between the government and private sector.
  • Like others, ISRO may need to work out a less labour-intensive way to manage its future programmes. However, the opening up of the sector should result in a welcome expansion of opportunities and a rapid development of capacity in this high-tech area.

SourceBusiness Standard

QUESTION – The opening up of the space sector for private participation presents huge opportunities for the space industry of India. Examine.

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