India's space players await more clarity on private participation norms

Companies stress on the need for an independent regulator for coordinating activities

FILES-INDIA-SPACE-MOON-SCIENCE (FILES) ISRO scientists work on the orbiter vehicle of 'Chandrayaan-2'| AFP

The Centre's move to allow more private participation in India's space missions is a welcome step to boost India's space programmes. Opening up the space sector for satellite manufacturing, launches, allowing private firms to use ISRO facilities and involving them in more space-based services was part of the Rs 20 lakh crore stimulus package announced by Finance Minister Nirmala Sitharaman last week. 

Though private entrepreneurs have termed it as a positive move, many are awaiting clarity on how it will be implemented. However, most companies agreed that it would help private players to create entire satellites and launch vehicles using ISRO's set-ups and then market them in the global markets. Entrepreneurs are just waiting for more guidelines on the same. 

“It is a positive step, but needs to be seen how it is implemented. I believe the change in procurement process and incentives for the private sector to invest more on its own will be more beneficial as a reform. For instance, the ISRO can publish requirements of images or communications, and can procure it from any private sector player who is able to provide that service. That will incentivise the private sector much more than just making the facilities available," said Narayan Prasad, co-founder and chief operations officer of Satsearch. "At the same time implementing systematic changes will allow ISRO to focus more on the technological innovation and science-related roles and leave the routine satellite development in mature markets like DTH and medium resolution imaging to the local Indian industry.” 

Undoubtedly, if the competence is created among private players to produce entire satellites and launch vehicles, they can capture the global market taking advantage of lower running costs in India. It, in turn, can help in the creation of a vibrant industry that can parallel some of the international achievements in the IT and biotech industry. 

Many agree that there is an urgent need to have an independent regulator for coordinating all this. “Continuous reform can only happen when an independent regulator is set up in the space sector and systematic changes happen in the procurement process to include startups, changing incentives for companies to invest in creating their own IP than just act as manufacturing partners to the ISRO,” added Narayan.

However, it needs to be noted that a lot will depend on the fine print. If privatisation goes beyond offloading production and AIT (assembly, integration, testing) activities and involves inviting design tenders from the industry for building satellites and launch vehicles, then it would greatly open up the sector for private players.

“Despite ISRO having had 500 industry partners and vendors since its inception, there are hardly a handful of companies building satellites and attempting to build launch vehicles in the country. Private space across the world has only survived because of contracts from their respective governments and thereby, privatising space in India along similar lines would be a major boost to the Indian industry. Moreover, it would free up ISRO's workforce to focus their efforts on space exploration and develop cutting edge space technology,” Rachna Reddy, a satellite engineer based in Germany, told THE WEEK. 

However, currently there is an oversupply of satellites and launch vehicles across the world with about 100 companies building satellites and around the same number of companies building rockets. Nevertheless, global trends show that across geographies, governments increasingly prefer to have one or more of their domestic players building satellites and launch vehicles to cater to their domestic and national demands rather than having to buy satellites and launch slots from foreign vendors.

“For Indian space companies, the biggest customers for their satellites and launch services would be government departments such as the meteorological department, the defense sector, and the like. For satellite applications such as earth observation data and analytics, the state governments would be the major customers. Given the large pool of engineers and highly skilled human resources in India, there would also emerge partnerships between Indian companies and foreign space companies to establish large-scale manufacturing facilities in India. The Azista and BST joint venture between an Indian legacy manufacturer and German satellite maker is one such example,” added Reddy. 

Space entrepreneur Pawan Kumar Chandana, the CEO and co-founder of Hyderabad-based Skyroot Aerospace, feels this is a positive step by the government. “This is a phenomenal reform for the Indian space sector. It will make India more internationally competent, foster innovation and increase utilisation of public infrastructure built over the last five decades.”