Syllabus: General Studies Paper 3 (Science & Technology)
Critically analyse why India must deregulate the space sector to encourage private enterprise if we are to compete in the new space economy.
India has established itself as a global player in space economy since establishment of Indian Space Research Organisation (ISRO) in 1969. India has been achieving great feats in the space arena ranging from Mangalyaan to launching 104 satellites at one go to the recent Chandrayaan 2 mission. However, it is ironic that India—whose space-faring tradition is decidedly in the service of human development—is lagging in harnessing the power of private innovation in the space domain. This not only limits the exploitation of space for economic development, but has serious national security implications.
Need for deregulating the space sector
- It is ironic that India—whose space-faring tradition is decidedly in the service of human development—is lagging in harnessing the power of private innovation in the space domain.
- This not only limits the exploitation of space for economic development, but has serious national security implications.
- The most basic way to secure our space capabilities is to distribute them across many different satellites and spacecraft.
- By deregulating space sector, business continuity is unaffected even if an adversary manages to disable one or more of our satellites. The more critical the function, the more the diversity required.
- The US is highly vulnerable in space because it depends on thousands of its satellites. But it is also best equipped to deal with a potential attack on its space assets because it can find alternatives to switch to.
- China is significantly increasing the number of its active space assets through massive public investment as well as opening its skies to private entrepreneurs.
- In this new space economy, India is playing with one hand tied firmly behind its back. While the Indian Space Research Organization (ISRO) is continuing on a successful path, there is no one at the private-sector end of the business.
- So, we must deregulate the space sector and create an environment for private industry to serve India’s commercial and strategic needs, and perhaps become a global space technology hub
Advantages of rising Space industry
- Adding an edge to India’s foreign policy as our space capabilities can be a part of our initiatives to foster new relationships,
- Avoiding the outflow of tax-payer’s money to foreign hands from where we procure turnkey products and services,
- Creating more opportunities for foreign direct investments (FDI), as well as new jobs for highly-skilled labour market,
- Empowering India’s defence system by equipping it with space technology, and allowing armed forces to procure defence products and services indigenously, and reversing the brain-drain from India.
- As US is planning to have 1000s of satellite through private players which actually help NASA to explore and endeavour more on the unexplored, same ISRO can also be benefitted
Challenges for private space entities
- Monopoly: In India ‘Space’ means Indian Space Research Organisation. Globally the technology is highly protected because of its dual use capability. Even if it was not, it would be prohibitively expensive.
- Funding: A major challenge in setting up a space business in India is funding. Space industry is capital intensive and upstream activities come with a long gestation period.
- Investor’s Dilemma: The lack of clarity among the investors and lack of the ecosystem required for significant contribution is a challenge for the investors.
- Lack of Regulation: India is a party to the Outer Space Treaty, where one of the fundamental requirements laid upon states is the supervision of space activities within its borders, the country did not have any formally legislated laws. This is a potential roadblock for commercialization.
- Growth Challenges: Scaling up, international marketing and funding are challenges.
- Lack of Support: the Indian ecosystem has neither incubation support nor pointers to seek support of leaders such as ISRO for space start-ups.
- Political and bureaucratic hurdles limit private space operations in India.
- Low in-house capacity of ISRO restricts them to very few launches in a year. Privatization can offload 30-40% of the work and help them work more efficiently.
- the new space economy consists of independent private players across the value chain, from launch vehicles to satellite payloads. Without a proper governance framework, they lack a firm basis to operate in India and thus find it hard to attract private investment.
- Indian government must accord space policy greater importance, and Parliament must expedite the enabling legislation.
- India’s new space policy must also incorporate our learning from the successful deregulation of telecom, insurance and civil aviation.
- Government must raise ISRO’s budget and encourage it to take up missions that push the technological frontiers.
- Creating an independent regulator to govern ISRO and its affiliates as well as new private sector firms. Separate licences can be awarded for different classes of launch vehicles, orbits and services.
- A public-private partnership (PPP) model can be looked into to realise ISRO’s workhorse Polar Satellite Launch Vehicle (PSLV), with a joint venture between ISRO and the private sector.
- In the UK, space ventures are treated as a complement to big organizations and not a competitor. This should be encouraged in India too.
- A supportive international partner and likeminded local partners helps to set up a space business.
- The idea should be to let the private industry build their own facilities after gaining enough expertise.
- ISRO has built a space technology park spread over 25 acres in Bengaluru where the entire range of facilities have been set up for use by the industry.
India’s new space policy must also incorporate our learning from the successful deregulation of telecom, insurance and civil aviation. In each of these sectors. The space sector should adopt the same model, with the department of space creating an independent regulator to govern ISRO and its affiliates as well as new private sector firms. Private entities such as Space X have been very successful in its endeavour by bringing innovation. India should allow private entities while establishing independent regulator to protect its security and provide ecosystem of growth for these players. It will put India into path of being global leader in space technology and market.
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