Although several companies, including Godrej and L&T among others, have engaged with the Indian Space Research Organisation (Isro) as suppliers and component manufacturers, they have never been vested with the responsibility of end-to-end manufacturing of space systems, despite private sector engagement going back to the 1970s.
Today, the need of the hour is for the industry to graduate from vendor to partner and provide end-to-end solutions, says Ratan Shrivastava, an independent aerospace and defence consultant.
This has not yet seen the light of day despite the intent and a wide gap in the capacity available and the requirements for services such as direct-to-home (DTH), where India is filling the gap by hiring capacity from Luxembourg-based satellite operator SES. “Even to meet the needs of Doordarshan, we are at less than half the capacity to have a pan-Indian DTH footprint,” says Shrivastava.
Ambitious schemes such as BharatNet and Digital India need more satellites and launches. This gap can be filled by investment and participation of the industry, for both the launch vehicles and later manufacturing of communication, earth observation and navigation satellites, if there is a level playing field and a legal and regulatory framework.
The legal and regulatory framework is a must to cater for aspects of liability, insurance, safety, launch risks, debris and protection of intellectual property rights. Currently, launches by private players are not covered by insurance companies. The framework for how to conceive, adopt and implement a space project is also missing, said Shrivastava.
Rakesh Sasibhushan, CMD of Isro’s commercial arm Antrix Corporation, says though the space-based service requirements of India have been met by Isro, the burgeoning demand from various stakeholders is far beyond the current capacity. This necessitates greater inclusion of the private sector in all areas of the space domain, including end-to-end design and manufacture of space systems. This will not only improve capacity, but also result in increased economic activity, contributing to the state exchequer.
The absence of an enabling regulatory framework is perhaps the biggest challenge that needs to be ironed out.
“I feel that the time is ripe for an overhaul of space regulations, considering the potential of Indian companies to step up and gain a sizeable share of the space business,” says Sasibhushan.
Private players can bring in the necessary capital, technical know-how and business acumen, and will free precious Isro
resources for it to concentrate on R&D, inter-planetary missions and cooperation with other agencies for space exploration, he says.
Neel Ratan, regional managing partner-north and government leader, PwC India, says the private industry could bring multiple benefits for India, including development of a self-sufficient industry contributing significantly to national income and foreign exchange reserves. What is required, he says, is an ecosystem of numerous small manufacturers and expansion of existing ones so as to ensure a greater share of the global space economy for India.
Space projects currently in pipeline in the country are estimated to be worth $1.5-1.6 billion, and nearly 70 per cent of it will go to the private sector. Currently, 80 per cent of Isro’s workhorse Polar Satellite Launch Vehicle production is outsourced to private industries. This could get a fillip once the Space Activities Bill is cleared by Parliament as it would pave the path for private participation by clearly enunciating the laws related to intellectual property rights.
is doing its bit in roping in private players for its production vehicles, it is not enough. It is keen to partner with component suppliers for manufacturing of vehicles as such a move will free up Isro’s time and resources into more research-related work. In this regard, two steering committees have been set up by the Isro
to create a comprehensive strategy for collaboration with the industry. The committees are engaged in discussions with private players on helping them transition from being vendors to integrators of launch vehicles and satellites. The launch of the first such vehicle, a PSLV completely built by industries, is planned for 2021.
A consortium led by L&T and HAL will be the prime contractors for this project. The vehicle will be fully assembled by them with the help of other ecosystem partners, which will play under them. The space agency has also formed a consortium of private players for assembly, integration and testing of 30-35 satellites and set up a new facility, spread over 24 acres in Bengaluru where the amenities can be used by the industry.
The government too is pitching in by setting up a separate arm for commercial operations of Isro. The New Space India Ltd, which was set up in March 2019, has entered into a licensing arrangement with Isro to build Small Satellite Launch Vehicle, which will lift satellites up to 500 kg into the earth’s low orbits.
Given the scale of opportunity, there is enough room for both private and public sector companies to co-exist. A PwC report pegs the industry could be worth $50 billion by 2024 if it plays to its strength. What is required is an enabling regulatory environment for private players to thrive.