Context:
The final frontier was once considered to be space, but ongoing exploration has transformed it, replacing romantic ideals with narratives intertwined with financial, socio-economic, and geopolitical implications. Traditionally, space technologies and flights were costly and risky endeavors primarily undertaken by national agencies. However, this paradigm has shifted, with private-sector entities increasingly expected to play a significant role by identifying market opportunities and driving rapid innovation.
Relevance:
GS3-Science and Technology
- Space Technology
- Achievements of Indians in Science and Technology
Mains Question:
Recently, the Indian government further embraced private sector involvement by permitting 100% foreign direct investments (FDI) in the “manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment.” In this context, analyse the necessity of private participation in the space sector and the hurdles in this regard. (15 Marks, 250 Words).
Space Sector in India:
- India’s prowess in the global space sector is acknowledged, particularly for constructing cost-effective satellites, and the country has extended its capabilities to launch foreign satellites into space.
- In adherence to its commitment to the Geneva Conference on Disarmament (1979), India consistently advocates for the peaceful and civilian use of outer space, vehemently opposing any militarization of space capabilities or programs.
- ISRO stands as the world’s 6th largest space agency, boasting an exceptional success rate. Additionally, India holds the fifth position globally in the number of space companies, with over 400 private entities, as reported by the Economic Survey of India, which has documented over 100 active space companies since 2012.
Recent Advancements in India’s Space Sector:
- The establishment of the Defence Space Agency (DSA), backed by the Defence Space Research Organisation (DSRO), marks a recent development in India’s space endeavors.
- The DSA is mandated to develop weapons aimed at “degrading, disrupting, destroying, or deceiving an adversary’s space capability.”
- The Indian Prime Minister officially launched the Defence Space Mission at the Defence Expo 2022 in Gandhinagar.
- India is also poised to expand its satellite-manufacturing capabilities, with the opportunity expected to reach USD 3.2 billion by 2025, a substantial increase from USD 2.1 billion in 2020.
- In a bid to foster space research among the youth, ISRO initiated the SAMVAD Program at its Bengaluru facility. This Student Outreach Program is designed to encourage and nurture space research endeavors among young minds.
- In 2020, India embarked on a transformative journey by initiating state-led reforms that opened the space sector to private companies.
- Subsequent developments included the introduction of the ‘Geospatial Guidelines’ and the ‘Indian Space Policy,’ the establishment of the Indian National Space Promotion and Authorization Centre (IN-SPACe), and the enactment of the Telecommunications Act 2023.
- This legislation, deviating from the Indian Telegraph Act of 1885, paved the way for satellite broadband services.
- On February 21, 2024, the Indian government further embraced private sector involvement by permitting 100% foreign direct investments (FDI) in the “manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment.”
- The government allowed up to 74% FDI in satellite manufacturing, operations, and data products, and up to 49% in launch vehicles, space ports, and their corresponding systems.
Relevance of the Recent Steps:
- By facilitating substantial FDI through the automatic route, the government has taken a logical step to encourage private space flight operators, technology developers, and application designers to contribute significantly to the national space economy. These efforts align with the ambitions outlined in the Space Policy.
- The decision empowers India to leverage its relatively unhindered foreign relations to narrow the gap with China’s more advanced position in space capabilities.
- While the Chinese space program benefits from considerable private sector involvement, its capacity to attract foreign investments is hindered by aggressive foreign policies and the Xi Jinping administration’s strategy to modernize the military by incorporating civilian technologies for military purposes – a policy shared by other countries, including the U.S.
- Pawan K. Goenka, the chairman of IN-SPACe, highlights that a “significant” portion of the $37.1 billion raised globally in the space sector from 2021-2023 went to space start-ups.
- In this broader context, fresh investments have the potential to enhance India’s space economy by facilitating improved access to talent and capital for start-ups.
Conclusion:
This could also achieve a better equilibrium between upstream and downstream opportunities, addressing the current bias towards the former. Additionally, it could stimulate local manufacturing and enhance investor confidence. To sustain these positive changes, the government must maintain a clear regulatory environment, reduce bureaucratic hurdles, increase public support, and facilitate Indian companies’ access to foreign markets.
