Why it is important for the country to tap the private space market

By: Anshul Vipat

This will signal the beginning of a new era for the space industry, which was liberalised by the government in June 2020 to allow for private-sector participation

The rocket was the nation's first space launch vehicle developed and run exclusively by a private enterprise. This was to signal the beginning of a new era for the space industry, which was liberalised by the government in June 2020 to allow for private-sector participation.

Role of private players in Indian space journey

Engagement of private players in Indian space market is not new. Companies like Godrej and Andhra Sugars partnered ISRO in the early days, and are described as the first generation of private players. While Godrej helped in making cryogenic and liquid engines, Andhra Sugars Limited has been producing rocket propellant fuels for a long time. According to experts, nearly 500 private players have been supporting ISRO since the 1960s.

The 2000s saw the rise of companies that would come to be the foundations of India’s New Space sector as we know it today. These included Earth2Orbit, Devas Multimedia, and Team Indus. New Space refers to the commercialisation of the sector.

Earth2Orbit, touted as India’s first private space start-up, was founded in 2009 by Susmita Mohanty, a spaceship designer and space entrepreneur. She is widely credited with playing a major role in opening up the launch sector in the country to big international customers from the West during a period of heavy restrictions, enabling more private customers and support.

In June 2020, the government opened up the space sector enabling the participation of private firms in the entire gamut of space activities. Prior to this, private companies did not have access to infrastructure of ISRO and other government space establishments.

The New Space India Limited – NSIL, was the first step in accepting private space players into the national space sector. NSIL is the commercial arm of ISRO, with the main goal of bringing the socio-economic benefits generated by space technology to the country. It was initially incorporated under the DoS in 2019 and then expanded in 2020, to enhance and widened its scope and business impact. A 10-point agenda noted in Vision 2030 identified a potential role for India as “the launchpad of the world. India then went on to establish the Indian Space Association (ISpA) in 2021.

According to the Economic Survey 2021-22, the number of startups working in the space sector has increased to 47 in 2021, from 11 startups in 2019. This took the total number of active spacetech start-ups in India to 101.

According to Tracxn, funding into this sector has also jumped 198.67 percent in 2021 touching $67.2 million across 11 rounds, up from $22.5 million in 2020 across nine rounds. These startups operating today are in both the upstream (satellite manufacturing, launch services) and downstream (ground segments such as consumer equipment, and data services like voice commutation or navigation).

With recent policy initiatives and private sector participation, the Indian space sector expects to capture a larger share of the global space economy, which was close to $447 billion in 2020.

A long road ahead

However, the road to that future is long. India’s space sector accounts for a minuscule 4 percent of the $440 billion global industry. Moreover, the sector is largely, if not entirely, public. In sharp contrast, global space players, particularly the private ones are fast grabbing up the market.

Take Elon Musk's SpaceX for instance. The company has launched 31 rockets, already matching its total for 2021, at a pace of one launch every 6.4 days and ten times as many launches as every one of its global competitors. The company is building a new launch tower in Florida, providing launch services for NASA and the Department of Defense, and operates 2,500 Starlink satellites offering internet access to a broad range of customers. Blue Origin, another private space agency in US has made four launches this year of which three were successful. According to Space Tech Analytics’ Space Tech 2021 report, there are more than 10,000 private space tech companies globally and 5,000 leading investors.

Source: SpaceTech-Industry-2021-Report

As advances in launch technologies have reduced costs and lowered barriers to entry, space has become accessible to more countries and offered opportunities for corporate cachet, discovery, and profit. In the last 15 years, commercial activity in space has tripled, from $110 billion in 2005 to $357 billion in 2020, and it is projected to rise to $1.1 trillion by 2040, according to projections by Morgan Stanley. According to the most conservative estimates, it accounts for 0.5% of the global GDP. It’s important that India taps this market.

However, India wants to make it big. Can India do it? Does India having the technological base to make a difference? Or is India becoming overambitious and trying to punch above its own weight? There may not be any clear-cut answers to such questions at this point in time. However, the pattern of reforms the Indian space industry is witnessing does indicate that India is seriously and sincerely trying to make it big in the space domain. The path may not be easy, but the approach appears to be honest.