The Minister of State for the Department of Space (DOS) has recently informed the Lok Sabha that the government of India is planning to open the space sector to Foreign Direct Investment (FDI). This initiative is part of a larger effort to promote research and innovation within the Indian Space Research Organisation (ISRO), increase dissemination of space technologies, and facilitate India’s rise as a global technology powerhouse.
Boosting ISRO’s Capabilities
One of the main advantages of opening the space sector to FDI would be letting ISRO focus more on researching and developing new technologies. Some of the organisation’s planetary exploration missions will now be available for the private sector to undertake through an ‘announcement of opportunity’ mechanism. This reform would also open up space resources to industries and academia, which could lead to better utilisation of these assets, and help India become a significant player in the global space economy.
Reducing Cost and Encouraging Competition
This move would also make space activities more cost-effective. The costs involved in setting up a base and launching space vehicles are much less in India compared to countries like the United States. Also, since ISRO is the 6th largest space agency in the world with a remarkable success rate, it presents a promising destination for foreign investors.
Benefits for Foreign Investors
Foreign investors can benefit from this reform as ISRO currently holds cutting-edge equipment and plans to launch the small satellite launch vehicle (SSLV) in partnership with private companies. Also, the liberalisation of the space sector could be beneficial for foreign entities planning to set up base in India.
Need for Reforms in the Space Sector
Reforms are needed to increase the scale of the sector – ISRO’s budget is between Rs 14-15,000 crore annually, most of which is used in building rockets and satellites. To increase the sector’s scale, it is imperative for private players to enter the market. By sharing knowledge and technology, such as manufacturing rockets and satellites with private players, ISRO aims to stimulate innovation and growth in the sector.
The Role of Private Players
Private entities can bring in the innovation necessary for developing space-based applications and services. The demand for these services is increasing worldwide and in India, with satellite data, imageries and space technology being used across sectors. Private players can also contribute to setting up ground stations for spacecraft which constitute a significant part of the space sector budget.
Related Initiatives
Several initiatives have been taken to facilitate the integration of private players into India’s space sector. IN-SPACE was launched to provide a level playing field for such entities to use Indian space infrastructure. It acts as a single-point interface between ISRO and anyone wishing to participate in space activities. NewSpace India Limited (NSIL) was announced in Budget 2019 to commercialise ISRO’s research and development through Indian industry partners. Finally, the Indian Space Association (ISpA) aspires to be the collective voice of the Indian Space industry, represented by leading domestic and global corporations.
Looking Ahead
India already boasts one of the best space programs in the world. Opening the sector to FDI may make India an even more significant player in the global space economy, promoting technology transfer, research innovations, and contributing to national and foreign reserves. The pending introduction of the Indian Space Activities Bill will provide further clarity for private players interested in being part of India’s space sector.
