Private odyssey: With government backing, private role in India’s space sector has taken off | 22 July 2023 | UPSC Daily Editorial Analysis

July, 2023 UPSC
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What's the article about?

  • It talks about the rise of the private sector in India’s Space Ecosystem due to sustained support from the government.

Relevance:

  • GS3: Achievements of Indians in Science & Technology; Indigenization of Technology and Developing New Technology; Awareness in the fields of Space;
  • Essay;
  • Prelims

Context:

  • The successful launch of the Chandrayaan-3 underscores the rise of the private sectors in the Indian Space Ecosystem.
  • Nearly 85% of the components of the LVM3, the rocket that carried India’s Moon lander and rover into space, were reportedly sourced from private firms, with many of the critical components developed in the GOCO (government-owned, companies operated) model.

Indian Space Sector:

  • India's space sector has been growing rapidly in recent years, with a valuation of USD 9.6 billion in 2020 and a contribution of 2%-3% to the country's GDP.
  • The Indian government has started space sector reforms to encourage, support, regulate, and provide start-ups and private companies an opportunity to engage in space operations to grow their market share globally.
  • This has opened up the space economy to private participation across all phases of the value chain, leading to an era of growth, innovation, and accelerated investment in the sector.
  • However, the Indian space sector also faces several challenges. These include access to capital, boosting investor confidence, and regulatory challenges.
  • The sector also needs to view the entire space segment as one system, close gaps in interdependence, improve interfaces and interaction, and build technologies for newer software-defined satellites.
  • Despite these challenges, there are several opportunities in the Indian space sector. The satellite manufacturing segment is expected to be the second-fastest-growing segment in the Indian space economy by 2025.
  • The growing demand for small satellites offers huge opportunities to many private companies.
  • With India's prowess in Information Technology (IT) sectors and talent, there is much potential for the Indian space sector to propel India on the innovation front.
  • In recent years, India's space priorities have shifted towards national security, with a growing perception of space security threats from China.
  • The Indian Space Research Organization (ISRO) has also been focusing on space exploration to gain greater technological competencies.

Analysis:

  • Rise of private sector:
    • The government established the Indian National Space Promotion and Authorisation Centre (IN-SPACe) in 2020 as a link between the Indian Space Research Organisation (ISRO) and the private sector.
    • This has led to a boom in the number of private-sector space start-ups, from 21 in 2020 to 146 now.
    • ISRO has transferred over 400 technologies to 235 industries, and has signed 620 tech-transfer agreements since the 1980s, and close to half of these transfers have happened in the past few years.
    • Transfers with the intention of buying back—that is, products made by the private-sector tech-recipient finding application in ISRO programmes—give confidence to investors of a dependable market.
    • Investors also see a less-costly alternative to European launchers that are grounded or under development, as well as access to a bustling manufacturing hub.
      Opening up of ISRO facilities for testing, tracking, in-lab development also facilitate hand-holding of the private sector.

Indian National Space Promotion and Authorisation Centre (IN-SPACe):

  • The Indian National Space Promotion and Authorisation Centre (IN-SPACe) is a single-window, independent, nodal agency that functions as an autonomous agency in the Department of Space (DOS).
  • It was established to enable and facilitate the participation of private players in India's space sector.
  • IN-SPACe acts as an interface between ISRO and Non-Governmental Entities (NGEs) and assesses how to utilize India's space resources better and increase space-based activities.
  • It also assesses the needs and demands of private players, including educational and research institutions, and explores ways to accommodate these requirements in consultation with ISRO.
  • IN-SPACe is expected to be a facilitator and regulator for the Private Space agencies and ISRO.
  • The main roles and responsibilities of IN-SPACe are as follows:
    • It is established as a single-window nodal agency, which will have a cadre of its own.
    • It will act as a link between the Indian Space Research Organisation (ISRO) and private sector companies, assessing “how best to utilise India’s space resources better and increase space-based activities”.
    • It will ensure greater private participation in the entire range of space activities.
    • It will allow and regulate space activities and the use of Department of Space-owned facilities by private entities.
    • It will ensure that private entities are able to use ISRO facilities and other relevant assets to improve their capabilities.
    • It will ensure that the interests of the country's security are safeguarded while promoting private participation in the space sector.
  • Indigenisation of the space technologies:
    • The focus needs to be on expanding indigenisation in space operations.
      Some materials and electronic components are still imported by Isro, with the share of imported components at around 10% for launch vehicles and 50-55% for satellites.
    • Critical components and materials must be “space qualified” for operations beyond 100 km above the Earth's surface.
    • There is a need to cater to the end-use needs of various organizations in the public and private sectors, such as the earth sciences ministry, telecom department, media companies, and weather forecasting companies.
  • Need more investments:
    • Development as well as acquiring space technologies needs a huge financing. To ease access to funding, the government is working on easing foreign direct investment in the sector (under the Space Policy announced in April).
    • Investments in Indian space start-ups have been growing at an impressive pace; from $23 million in 2020, it climbed to $109 million in 2022.

Way Forward:

  • The potential for the private sector in India’s space industry is huge—the satellite manufacturing market is expected to reach $3.2 billion by 2025, while the launch and satellite services markets are expected to reach $1 billion and $5 billion, respectively.



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