Private Sector Investment in Space Industry


    In Context

    • Recently, the government is seen making efforts to increase private sector participation in the space industry.

    More about the news

    • The Indian government would soon come up with a new space policy that could initiate the rise of India’s own “SpaceX-like ventures”.
      • SpaceX is Elon Musk’s private space transportation company.

    Significance of the Space industry

    •  Assessing & recording weather information:
      • Satellites provide more accurate information on weather forecasts. 
      • It can also assess (and record) long-term trends in the climate and habitability of a region. 
        • For example, by monitoring the long-term impact of climate change at regional, territorial, and national scales, governments would be able to devise more pragmatic and combative plans of action for farmers and dependent industries. 
    • Real-time tracking :
      • Satellites can serve as real-time monitoring and early-warning solutions against natural disasters such as earthquakes, tsunamis, floods, wildfires, mining etc. 
      • Real-time tracking can also serve multiple purposes in defence.
    • Communication and connectivity:
      • As for connectivity, satellite communication can reach more remote areas where conventional networks would require heavy complimenting infrastructure. 
      • Additionally, as to the reliability, the World Economic Forum(WEF) stated that satellite communication can help connect 49% of the world’s unconnected population
      • In this light, it must be noted that satellite communications, which are used to facilitate telecommunication services, are among the major categories for investment in the space technology sector. 
      • Other prominent categories include spacecraft and equipment manufacturing.
    • Benefits to other sectors:
      • The space avenue is an integration of the aerospace, IT hardware and telecom sectors
      • It is thus argued that investment in this arena would foster positive carryover effects to other sectors as well.

    Space Economy

    • The global space industry includes the industry’s core activities in-space manufacturing and satellite operations.
    • The main segments of the space economy include manufacturing, services from satellite operators and consumer services

    India’s share in Space Industry

    • Global position:
      • According to SpaceTech Analytics, India is the sixth largest player in the industry internationally, with 3.6% of the world’s space-tech companies. 
      • The US is the housing leader of 56.4% of all companies in the space-tech ecosystem. Other major players include the UK (6.5%), Canada (5.3%), China (4.7%) and Germany (4.1%).
      • Most of the companies in this sector, globally, are involved in manufacturing spacecraft equipment and satellite communications.
    • Cost-effectiveness:
      • The country’s standout feature is its cost-effectiveness. 
      • India holds the distinction of being the first country to have reached the Mars’ orbit in its first attempt and at $75 million — way cheaper than Western standards.
    • Start-ups in Space sector:
      • The 60-odd start-ups that had registered with the Indian Space Research Organisation (ISRO), a majority of them were dealing in projects related to space debris management. 
        • As space becomes more congested with satellites, the technology would thus help in managing ‘space junk’ (debris of old spacecraft and satellites).

    Regulation of the Private sector in the Space industry in India

    •  National Space Promotion and Authorisation Centre (IN-SPACe):
      • About:
        • It is an autonomous and single window nodal agency in the Department of Space for the promotion, encouragement and regulation of space activities of both government and private entities. 
      • Mandate and responsibilities:
        • It is mandated the task of promoting, authorising and licensing private players to carry out space activities
        • It is responsible for devising mechanisms to offer sharing of technology, expertise facilities free of cost (if feasible) to promote non-government private entities (NGPEs)
      • IN-SPACe’s Monitoring and Promotion Directorate:
        • It oversees NGPE’s activities as per prescribed regulations and reports back in case any corrective actions or resolutions are required.
      • ISRO facilities:
        • ISRO shares its expertise in matters pertaining to quality and reliability protocols, documentation and testing procedure through IN-SPACe’s ‘interface mechanism’.
        • It also facilitates the usage of ISRO facilities by private entities.
    • NewSpace India Ltd (NSIL):
      • It is mandated to transfer the matured technologies developed by the ISRO to Indian industries. 
      • All of them are under the purview of the Ministry of Defence.


    • Monopolisation:
      • Space technology is expensive and needs heavy investment. 
      • This kind of lucrative power is available only with selected rich corporates, thus can lead to monopolisation of the sector. 
    • Favouring the private sector:
      • Also, IN-SPACe’s role has been defined as a government regulator, ‘to provide a level-playing field’ for everyone. 
      • However, in the past, this has resulted in the governments favouring the private sector over the public sector or leaning towards specific private brands. 
    • Backseat for social development:
      • ISRO, since its inception, has always aimed to work on projects that can help India become self-reliant. 
      • The space program always worked on applications like remote sensing, tracking of land use, resource mapping, among others. 
      • However, private companies will have more profitable interests than developing solutions that cater to the immediate socio-economic needs of the country. 

    Way ahead

    • Private sector’s involvement in the long term, as with other commercial sectors, is believed to help spur investment and expertise in the realm which is capital-intensive and demands high technology.
    • Since private space activities will significantly increase if the policy is accepted, India needs to develop a robust legislative framework for space to ensure sustainable and inclusive growth.

    Source: TH