The next frontier
- Space used to be the final frontier but its increasing exploration has changed that, replacing a romantic notion with narratives with financial, socio-economic, and geopolitical implications.
Key Points
- Space technologies and space flight are expensive, risky endeavors 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, and/or lead the way by identifying market opportunities and innovating 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),
- 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 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 the contributions of private space flight operators, technology-developers,
- Application designers to the national space economy, in line with ambitions outlined in the Space Policy.
- The decision gives India the ability to take advantage of its less vitiated 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 by its belligerent foreign policies
- The Xi Jinping administration’s plan to modernize the military by, among other things, adapting civilian technologies for military use
- Though other countries, including the U.S., have similar policies.
- According to IN-SPACe chairman 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 a better balance between upstream and downstream opportunities, versus the current skew in favour of the former
- Boosting local manufacturing
- Improving investor confidence.
Conclusion
- Finally, to sustain these winds of change, the government must keep the regulatory environment clear, reduce red tape, increase public support,
- Ease Indian companies’ ability to access foreign markets.