India needs to enact space law, attract FDI to boost space sector, say experts

Experts say that a revised policy on Foreign Direct Investment (FDI) for the space sector, coming out with the Space Activity Bill, encouraging upstream industries are some of the big moves that await the Indian space sector.

Two years after opening up the space sector for private players, the Indian government recently came out with the sectoral policy. According to industry experts, apart from the policy, the Space Activity Bill and a revised FDI policy should be announced.

“The next move should be to create a strong upstream industry in India. This is essential for the start-ups and many downstream industries to flourish. For this, it is required to attract FDI from global space industries,” Rakesh Sashibhushan, former Chairman and Managing Director, Antrix Corporation, earlier the commercial arm of Department of Space, said.

Presently, FDI in the space sector is allowed up to 100 per cent in the area of Satellites Establishment and Operations through government route only. The Indian government said that the regulatory and promotional body for private sector space activities Indian National Space Promotion and Authorisation Centre (IN-SPACe) was involved in revision of FDI policy.

The revised FDI policy is presently under consideration of the government. The specific role of IN-SPACe for channelising FDI will evolve after approval of revised FDI policy by it, the Indian government has said. Industry officials also want the Space Activity Bill to be legislated defining the powers and responsibilities and a statutory status for IN-SPACe.

The Space Activity Bill should be released by the government, Sunil Indurti, Director, Azista BST Aerospace Pvt Ltd said. “For Space industry to conduct business, it is essential to enact a Space Law which is business friendly and forward looking rather than restrictive and punitive,” Sashibhushan added.

Presently, IN-SPACe is under the Department of Space. However, it has to be seen whether IN-SPACe will get the statutory status as not such status has been given to the atomic power sector regulator – Atomic Energy Regulatory Board (AERB).

Be that as it may, Sashibhushan said In-SPACe Chairman, Secretaries of Space, Telecom and Science & Technology are the people to drive the commercial space sector.

But unfortunately, there is no joint committee to discuss and form future plans, Sashibhushan said. India is known for its ability to create space assets and services with meagre budgets compared to other space faring countries.

“India is probably the only developing country to be recognised as a Space power and in the same league as USA, Russia, France, China and Japan,” Sashibhushan remarked.

However, the story of Indian Space as a net contributor to the economy, and having a wealth of space industry, is different as its share in the global space industry is less than five per cent, Sashibhushan added.

There are no companies with end-to-end technical capability (in Space technology) in India. And India still depends on imports for space based services. According to Sashibhushan, the restrictive policies followed by the Department of Space meant that no industry could get into the space sector seeking business opportunities.

“This has remained a big handicap as far as commercial space is concerned even after liberalisation. There are more than 50 start-ups in the space sector though, which is promising. But the absence of strong ancillary industries and service providers is an impediment in their progress,” Sashibhushan said.

“Many of them suffer from funding and financial support which is crucial for nurturing start-ups. A dedicated fund exclusive to space start-ups is yet to happen as far as I can understand and some restrictions still remain in accessing space data of India,” Sashibhushan added.

The other big move to induce competition is that the government should follow demand-led procurement of satellites/launch vehicles/analytics services from private industry for defence/civilian applications, Azista BST’s Indurti said.

For the Indian space sector, human spaceflight will be the major event in the coming years and some space startups are gearing up to that.

“Human Spaceflight is the next big thing that is going to happen in India over the next 5 to 10 years,” Sanjay Nekkanti, CEO, Dhruva Space said. Nekkanti said in the next 18-24 months, Dhruva Space shall be setting up an assembly, integration and testing facility to contribute to human spaceflight.

“Dhruva Space can build some of the critical elements related to the human spaceflight programme; these elements include large solar arrays for satellites that can also be used in the human spaceflights around crew capsules or space stations. Dhruva Space’s Ground Station offerings can also contribute towards the communications infrastructure of these missions,” Nekkanti added.