San Francisco-based Planet Labs had to secure a special waiver from the US government to launch 88 satellites from its Flock 3p group through Indian Space and Research Organisation because of a policy that discourages American companies from using Indian launch services.
While economics is driving American companies to Indian shores, politics prevented them from doing so in the past. The policy is a legacy of the time when India was blacklisted by the United States after the 1998 nuclear tests in Pokhran and American companies were banned from doing business with Indian firms.
As part of the export control policy, a list of 200 entities, including agencies of the Indian Space Research Organisation, was drawn up and US companies were barred from doing anything with them.
When ISRO launched a record breaking 104 satellites on Wednesday, there were 101 foreign satellites on board and 96 of them were American. ISRO had launched 40 foreign satellites by 2014 but none of them was from the US.
However, the US has emerged as the Indian space agency’s top customer in just over two years.
Planet Labs, an earth observation company formed in 2010 by former Nasa scientists, chose ISRO’s PSLV launch for the second time on Wednesday. The company used the Indian space agency’s services to launch a set of 12 Flock 3p in June last year. It has launched 100 nano-satellites through ISRO till date.
The reason ISRO is preferred by foreign companies for satellite launches because it is able to send them to space at a cheaper rate compared to an American company like SpaceX.
“Rocket scientists in India come at a cheap rate. Once the design is finalised, it is only a question of putting nuts and bolts and making it,” Ajey Lele, a senior fellow at the Institute for Defence Studies and Analyses, said.
The export control policy was so strictly imposed that when a South Korean company wanted to launch a satellite in India, they were prevented from doing so by the Americans because some of its components were manufactured in the US.
The implementation of the policy has become almost equally lax now.
In the past decade, American companies looking for cost-effective launch services pushed hard for a review of the policy. Ties between India and the US improved significantly since the early 2000s and many sanctions were lifted with the signing of the Indo-US nuclear deal in 2008.
However, the export policy with regard to commercial launches has remained in place.
If American companies must launch in India they need to apply for a waiver, which is approved on a case to case basis.
Rachel Holm, a spokesperson of Planet Labs, confirmed they did apply for a waiver but refused to comment on the broader policy discouraging US firms from using Indian launch services.
This contradiction between the stated policy and the reality has not gone unnoticed. Last year, the Committee on Science, Space and Technology under the US House of Representatives wrote to top officials to clarify the policy on access to Indian launch services.
“The policy of not using ISRO launches would be detrimental to the US companies with immediate launch needs. Which is why the committee agrees that waivers on a case by case basis are needed for allowing US satellites to be launched on Indian PSLV or GSLV rockets,” a release from the committee said in 2016.
In recent years, American private launch companies have opposed the reliance on ISRO. Even though ISRO conducts these agreements through its business arm, Antrix, industry interest groups in the US have argued that the Indian government subsidises ISRO launches so they don’t reflect the true costs.
This distorts the playing field for private American launch companies, they argue.
Globally, 940 satellites have been launched in the past decade by government agencies and commercial entities. This market is likely to grow and ISRO, though it is a late entrant, has made rapid inroads in the commercial launch market.
The attractiveness of ISRO for American companies will be short-lived, trade groups in the US hope as their domestic industry matures and becomes competitive. It is still doubtful they will match ISRO’s cost effectiveness.
“There is a long line of countries that want to work with ISRO, we don’t need them,” Lele said.