India plans space sector boost in global market
India will soon allow overseas companies to invest in the space sector with a revised foreign direct investment (FDI) policy, taking the next step in opening up the sector to not only private players within the country but also abroad, the chairperson of the Indian Space Research Organisation (Isro) on Monday said.
At the same time, India will set targets to increase its share in the global space economy from less than 2% at the moment to 10%, said Dr Pawan Goenka, the newly appointed chairperson designate of the Indian National Space Promotion and Authorisation Centre (INSPACe), the body responsible for promoting and regulating space activity in the country.
“The space foreign direct investment policy is getting revised and it will open huge opportunities for space companies to invest in India. It will ensure sustained engagement between Indian and overseas companies that will greatly benefit both. With this policy, space sector will not only be open in India but also to foreign investments. ISRO on the other hand will concentrate on research and development as well as space science missions. It will work on overcoming challenges and reducing the technological gaps in a timely and more responsive manner,” Dr Sivan said at a conference.
Last year, the Union government opened up the space sector to private players, announced by Union minister Prakash Javadekar in June 2020,leading to a growth in the space start-ups. Several start-ups were working on space projects but were collaborating with other countries due to a lack of framework in India. An interim INSPACe, headed by Isro’s scientific secretary Dr Umamaheshwaran, is in the process of looking at nearly 40 applications by the industry for various space missions and space-based applications.
The regulatory mechanisms for INSPACe – by which it will be able to take action against erring space players – is also currently under review. “INSPACe will also have a regulatory mechanism… It is already going through departmental reviews and inter-ministerial consultations before being tabled in the parliament,” said Dr Umamaheshwaran in the conference. The government has a draft space activities bill, 2017 which provides a regulatory framework, but has not been tabled yet.
In addition, the department of space is also finalising new policies on satellite-based communication and remote sensing to aid penetration of the industry in the space applications domain. The drafts of other policies to help the private sector such as satellite-based navigation technology are also being edited.
Dr Pawan Goenka, a former director at Mahindra & Mahindra and the chairperson designate of INSPACe, said he will be interacting with Isro scientists and industry experts over the next few days. Although India is one of the top space faring nations, it perform poorly when it comes to the space economy, he said. “Space is a $440 billion sector globally but India has less than 2% share even though India is a leading space fairing country. I would target for India achieving a certain market share globally; I would say 10% based on my limited knowledge. I would set a time frame after learning more,” said Goenka.
He added that the investment by space sector startups in India is just $21 to $22 million, which is less than 0.5% of that by global startups, and stressed that creating clarity on the regulatory policies will be his first priority as the chairperson.
“There have been long-term issues with capacity constraints such as that of human resources, facilities, but mainly budgets. ISRO’s budget hasn’t significantly increased in recent times and that is an important driver of foreign investment. This step can create competition for Indian players but it is more likely to create partnerships. The newer, smaller space start-ups are always looking for various avenues for funding; youngsters are putting their money into the start-ups. This step could help in bringing in the finances and build strong partnerships with the start-ups that already have the technical know-how,” said Dr Rajeswari Rajagopalan, director of the centre for security, strategy and technology at the Observer Research Foundation.
She said increasing India’s global market share to 10% is a big ask and the country will have to strengthen manufacturing as well as launching services to do so. “We will have to strengthen everything from manufacturing, infrastructure to launching in order to capture a big chunk of the market. Launches have seriously gone down during the pandemic; ISRO was significantly affected. However, it is a good sign,” said Dr Rajagopalan.