The next frontier: On India’s space sector

The government must keep the regulatory environment of space sector clear

Space used to be the final frontier (a border between two countries) but its increasing exploration (the activity of searching and finding out about something) has changed that, replacing a romantic notion (a belief or idea) with narratives with financial, socio-economic, and geopolitical implications. Space technologies and space flight are expensive, risky endeavours (to try to do something) that only national agencies were suited to engage in for decades. This is no longer true as private sector players are increasingly expected to complement, augment (to increase the size or value of something by adding something to it), and/or lead the way by identifying market opportunities and innovating (to introduce changes and new ideas) rapidly. India started on this path in 2020 with state-led reforms that opened its space sector to private companies, then releasing the ‘Geospatial Guidelines’ and later the ‘Indian Space Policy’, creating the Indian National Space Promotion and Authorisation Centre (IN-SPACe), and passing the Telecommunications Act 2023 that, among other departures from the Indian Telegraph Act, 1885, provided for satellite broadband services. On February 21, the government opened the door to 100% foreign direct investments (FDI) in the “manufacturing of components and systems/sub-systems for satellites, ground segment and user segment” — up to 74% in satellite-manufacturing, operations, and data products; and up to 49% in launch vehicles, space ports, and their corresponding (similar to, connected with, or caused by something else) systems. As such, by stepping out of the way and allowing substantial FDI via the automatic route, the government has taken the logical next step in spurring (to encourage an activity or development or make it happen faster) the contributions of private space flight operators, technology developers, and application designers to the national space economy, in line with ambitions (a strong wish to achieve something) outlined in the Space Policy.

The decision gives India the ability to take advantage of its less vitiated (to destroy or damage something) foreign ties to catch up with China’s more advanced position as a space power. While the Chinese programme benefits from not-inconsiderable private sector participation, its ability to attract foreign investments is hamstrung (to limit the amount of something that can be done or the ability or power of someone to do something) by its belligerent foreign policies and the Xi Jinping administration’s plan to modernise the military by, among other things, adapting (to change, or to change something, to suit different conditions or uses) civilian technologies for military use, though other countries, including the U.S., have similar policies. According to IN-SPACe chairman Pawan K. Goenka, a “significant” slice of the $37.1 billion that the space sector raised worldwide in 2021-23 went to space start-ups. Against this extended backdrop, new investments can add to India’s space economy by improving start-ups’ access to talent and capital; effecting (the result of a particular influence) a better balance between upstream and downstream opportunities, versus the current skew in favour of the former; boosting local manufacturing; and improving investor confidence. Finally, to sustain these winds of change, the government must keep the regulatory (of or relating to a person or organization whose job is to control an activity or process or to the regulations themselves) environment clear, reduce red tape, increase public support, and ease Indian companies’ ability to access foreign markets.

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