Govt Wants Private Sector To Invest In Space; Companies Wait To See Commitment From Govt

Despite the success of Chandrayaan-3 mission and the government introducing the space policy in April 2023, a host of factors seem to make investment in space sector a cautious prospect for private players

The global space economy is currently around $447 billion, according to estimates by McKinsey. India’s share of the pie is about $8 billion, a measly two per cent.

The Indian National Space Authorization Centre (IN-SPACEe) has set a target to increase this to 8% by 2033 and 15% by 2047, the 100th year of Independence. The government believes that the key to this is the increased participation of the private sector, especially the larger players.

However, despite the success of the Chandrayaan-3 mission and the introduction of a space policy in April 2023, a host of factors seem to make investment in space sector a cautious prospect for private players.

The Big Enabler

The Chandrayaan-3 mission successfully landed on the south pole of the moon on August 23, 2023. ISRO aims to set up the first Indian Space Station by 2035.

“We are aiming for the first module of the Indian Space Station by 2028, and then we would progressively start building it so that the Indian Space Station will be in orbit by 2035,” said Victor Joseph, associate scientific secretary at ISRO.

Joseph was talking at a panel discussion on ‘From the moon to the sun: The dawn of the India NewSpace ecosystem’ at the Bengaluru Tech Summit that concluded last week.

Including the tall ambition of landing an Indian on the moon by 2040, ISRO has charted out its road map of space programmes till 2047. Joseph outlined technologies such as in-orbit servicing, propulsion systems, artificial intelligence and in-situ resource utilisation, which, according to him, would be the enablers to achieve the roadmap.

“In-orbit servicing would include docking in space, repairing and so on. Another area is AI — we need robots, humanoids and spacecraft that are self-decision-making. These systems will play a very critical role with respect to safety and security.”

“Then there is in-situ resource utilisation, that is utilising local resources from other planets to make missions more economical,” he said. He also noted that ISRO’s technological directions include satellite communication, earth observation, navigation and space science.

Industry Participation

In 2019, the government formed the New Space India Limited (NSIL) with the idea of commercially exploiting the global space market.

In June 2020, IN-SPACe was formed to increase private participation in the space sector. In April 2023, the Indian Space Policy was approved mainly with the aim of facilitating the private sector access to the space sector.

During the panel discussion, Joseph noted that the technological vision for the Indian space sector can translate into economic growth not just with government initiatives but with increased private sector participation.

“By 2047, we wish to increase India’s share (in the global space market) to 15%. The key to that is not only the government but also the private space sector. We already have many start-ups and MSMEs in play. But I think a much larger scale of industry participation, mainly from large industry houses, and the support of start-ups, will help to achieve such targets,” he said.

“We have a very good number of Indian companies developing technologies for launch vehicles, space crafts and innovative space applications. There should be more of that … Capacity building and end-to-end systems development by industry with the support of academia is what we have to aim for,” he added.

Private Players Cautious

Sreeram Ananthasayanam, a partner with Deloitte India, recollected the day of the Chandrayaan-3 landing as he spoke to the audience attending the panel discussion.

“When the lander touchdown was happening, I was about to enter a plane in the Bengaluru airport. There were five of us standing in the aerobridge refusing to enter the plane till we heard, ‘Sir, India is on the moon’.”

“After that, we walked into the plane, and you wouldn’t believe the kind of energy we saw among the passengers. The pilot was announcing the news with so much pride. I really hope after all of these, space tech and aerospace would become a choice as important as AI-ML or data science that young minds would get into,” he said.

While the landing of Chandrayaan-3 was a proud moment for the country, the excitement, however has not translated into big private players jumping into the space bandwagon.

According to Ananthasayanam, the new space policy has democratised the space sector, unlike earlier when the sector was highly regulated, decisions were centralised and very little commercialisation happened. He noted that significant private participation and cross-border collaboration have been happening in the sector, the role of non-government entities has been formalised, and the policy has laid out who is going to do what.

Nevertheless, there are a lot of unticked boxes, he said.

Space Activities Bill And Subsidies

The primary demand of the private sector is around policy and regulations. According to Ananthasayanam, the industry hopes to see the Space Activities Bill cleared in Parliament at the earliest.

“It will give a very clear role and legal teeth to the various entities,” he said.

The Bill, introduced in 2017 and pending before Parliament, encourages the participation of private sector players in space activities.

Ananthasayanam also made a case for further tax exemptions, tax holidays, incentives and grants for the private players in the space sector and production-linked incentives — not just for space components but also for space-grade components that could be used in non-space sectors.

“We did an industry consultation at Deloitte with 20 odd start-ups last week … One of the key things that start-ups were clear and unanimous in asking for was some kind of assembly integration testing facilities, which probably the government would subsidise because this is capital intensive,” he said, demanding a mechanism to take care of the huge working capital, and grants similar to what iDEX (Innovation for Defence Excellence) offers defence companies.

Democratising Space Data

During the panel discussion, Ananthasayanam also proposed to make downstream imagery from space and associated tech a DPI/DPG hoping that it would democratise space data and help to kickstart innovation in the country on downstream analytics of the space.

A DPI is a digital public infrastructure like Aadhaar or UPI, whereas a DPG refers to Digital Public Goods, which are open-source solutions. These solutions could be software, AI models, data, standards or content. In other words, DPGs enable DPIs.

Citing examples from agriculture and healthcare to back his recommendation, Ananthasayanam said, “The last Budget talked about agriculture being a DPI/DPG, now we are seeing Agri Stack and Krishi-DSS coming up. Prior to it, healthcare became a DPI/DPG, and we saw how quickly COWIN rode on top of it and gave us the benefits.”

Commitment From Govt

One of the major demands from the private sector is a long-term commitment from the government to ensure demand for space-related products and services.

Noting that space is a highly capital-intensive domain and most products are made to order and have a long lifecycle, Ananthasayanam said, “Unless and until there’s a long-term established demand, it is really difficult for the private sector to start investing in it. Perhaps the government could announce that they are going to be the front-runner in terms of consuming space imagery for decision-making. Or perhaps they could mandate that as a policy.”

The other recommendations included a socio-economic impact assessment for various sectors in the country, including space- which in turn could provide concrete numbers and statistics about the sector. Initiatives to tap young minds from the hinterlands, efforts to retain talent, expediting the adoption of space technologies and focusing on futuristic technologies were also among the proposals.

“Most importantly there are legacy private sector space companies who have been tier-1 suppliers to ISRO. Is there a way by which they can act as mentors or coaches to the start-up ecosystem and start helping them to grow?” Ananthasayanam wondered.

“If we can focus on such aspects, our ambitions would become a reality much before 2047,” he added.