Baba’s Explainer – Privatisation in Space Sector

  • IASbaba
  • July 26, 2022
  • 0
Science and Technology
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  • GS-3: Science and Technology- developments and their applications and effects in everyday life. 
  • GS-2: Government policies and interventions for development in various sectors
  • GS-3: Indian Economy and issues relating to planning, mobilization, of resources

Context: In 2022, the space sector is witnessing what the information technology sector experienced in the 1990s. As a result, government would soon come up with a new space policy that could initiate the rise of India’s own “SpaceX-like ventures”.

  • The proposed move would increase private sector participation in the industry.
What are the structural changes that are reshaping the global space activity?
  • Through the second half of the 20th century, outer space was the sole preserve of national space programmesdriven by government-funding, direction and management
  • As military uses of space and prestige projects like Moon-landing emerged, major private sector entitiesalready in the aviation industry won space contracts in the US but under overall guidance & control of NASA & Pentagon
  • The last decades of the 20th century saw significant expansion of satellite-based telecommunication, navigation, broadcasting and mapping, and lent a significant commercial dimension to the space sector.
  • As a result, private sector companies(Ex: Space X) started playing major role in the sector like independent Space launches. Hired for a resupply mission for the space station, Space X now launches more rockets every year than NASA
  • The entry of private sector has begun to drive down the cost-per-launch through innovations such as reusable rockets.
  • As the digital revolution in the 21st century transformed the world economy, the commercial space sector has begun to grow in leaps and bounds.
  • The global space businessis now estimated to be around $ 400 billion and is expected easily rise to at least trillion dollars by 2040. This has made private sector participation attractive and inevitable.
What does the commercialisation/privatisation of the space sector mean in practical terms?
  • Space Sector Revolutionized: With its reusable rockets, large capsules to carry payloads and crew and competitive pricing, SpaceX has revolutionised the space sector.
  • Technology has brought down the Cost: The price tag for reaching low Earth orbit has declined by a factor of 20 in a decade. NASA’s space shuttle cost about $54,500 per kg; now, SpaceX’s Falcon 9 advertises a cost of $2,720 per kg.
  • Increased Market: According to a Bank of America Report, the $350 billion space market today will touch $2.7 trillion by 2050.  In a decade, 80,000 such satellites could be in space compared to less than 3,000 at present
  • Telecom Revolution: The aim of Starlink exercise is to provide Internet services that link any point on Earth to any other point. Targeting coverage in northern U.S. and Canada by end of 2020, the aim is to have the globe covered by 2021. This will be the new telecom revolution then, in the context of India, reaching out to rural areas as never before.
What is the significance of development of Space Sector?
  • Better Weather Prediction: Satellites provide more accurate information on weather forecasts and assess long-term trends in the climate and habitability of a region. As a result, governments would be able to devise more pragmatic and combative plans of action for farmers and dependent industries.
  • Real time Tracking: With more accurate data collected through satellites can also serve as real-time monitoring and early-warning solutions against natural disasters such as earthquakes, tsunamis, floods, wildfires, mining etc. Real-time tracking can also serve multiple purposes in defence.
  • Bolsters Connectivity: Satellite communication can reach more remote areas where conventional networks would require a heavy complimenting infrastructure.
  • Space Debris Management: As space becomes more congested with satellites, advanced space technology is required to help in managing ‘space junk’ (debris of old spacecraft and satellites).
  • Spillover effect on multiple sectors: What essentially needs to be remembered is that the space avenue is an integration of the aerospace, IT hardware and telecom sectors. It is thus argued that investment in this arena would foster positive carryover effects to other sectors as well.
What are the challenges to fulfilling the potential of space?
  • Multilateral framework for Space governance is becoming outdated for present context
    • The Outer Space Treaty of 1967 enshrines the idea that space should be “the province of all mankind” and “not subject to national appropriation by claims of sovereignty”.
    • The Rescue Agreement, Space Liability Convention, and the Space Registration Convention expanded provisions of the Outer Space Treaty.
    • Gaps in the Space laws include
      • The Moon Treaty of 1979 was not ratified by major space-faring nations.
      • Space law does not have a dispute settlement mechanism
      • Space law is silent on collisions and debris
      • They offer insufficient guidance on interference with others’ space assets.
    • The legal framework of Space laws is state-centric, placing responsibility on states alone
      • However, non-state entities are now in the fray for commercial space exploration and utilisation.
      • Some states like US are providing frameworks for resource recovery through private enterprises based on the notion that this is not expressly forbidden for non-state actors.
      • Some scholars and governments view this as skirting the principle of national non-appropriation, violating the spirit if not the letter of the existing space law.
      • The lack of alignment of domestic and international normative frameworks risks a damaging free-for-all competition for celestial resources involving actors outside the space framework.
    • Space Arms race and Growing Militarisation
      • States are investing in military space systems for communications, navigation, and reconnaissance purposes, so as to ensure operability of a range of capabilities.
      • Reliance of militaries on satellite systems means that space assets become potential targets. So investment in technologies that can disrupt or destroy space-based capabilities is under way.
      • The space arms race is difficult to curb, especially since almost all space technologies have military applications
Where does India stand in the global space market?
  • As per SpaceTech Analytics, India is the sixth-largest player in the industry internationally having 3.6% of the world’s space-tech companies (as of 2021).
    • S. holds the leader’s spot housing 56.4% of all companies in the space-tech ecosystem. Other major players include U.K. (6.5%), Canada (5.3%), China (4.7%) and Germany (4.1%).
  • The Indian Space Industry was valued at $7 billion in 2019 and aspires to grow to $50 billion by 2024.
  • The country’s standout feature is its cost-effectiveness. India holds the distinction of being the first country to have reached the Mars’ orbit in its first attempt and at $75 million — way cheaper than Western standards.
  • Most companies in the sector, globally, are involved in manufacture of spacecraft equipment and satellite communications.
  • S. and Canada were the highest receivers of space-related investment in 2021.
    • A scrutiny of SpaceTech data puts forth that U.S. alone has more companies in the sector than the next 15 countries combined. Forbes pointed out in May 2021 that.
  • India’s total budgetary allocation for FY2022-23 towards the Department of Space was ₹13,700 crore. Further, funding into the sector’s start-ups (in India) nearly tripled to $67.2 million on a year-over-year basis in 2021.
    • USA’s space budget was $41 billion in 2021, $23.3 billion of which was focused on NASA. The spur in research and innovation driven by government-led spending could also be attributed to the global concentration of considerable number of private investors in the country.
  • It is not that there is no private industry involvement in India’s space sector. In fact, a large part of manufacturing and fabrication of rockets and satellites now happens in the private sector
  • However, Indian industries’ role has been mainly that of suppliers of components and sub-systems while there is huge scope for participation in satellite-based services, and ground-based systems.
  • There were several Indian companies waiting for make use of these opportunities but the policy environment in India was supportive of private players
    • Additionally, the demand for space-based applications and services is growing even within India, and ISRO is unable to cater to this.
How is the space scenario changing in India?
  • Shift in Focus of ISRO: There has also been a shift from a mandated focus on utilitarian projects to those focused on exploring space and our planetary neighbours, the Moon, the Sun and so on.
  • Increasing role of Private Players: As a result of shift in ISRO’s focus, we have seen the yielding of governmental control over the space industry bit by bit, starting from hiring of vendors and active outsourcing of rocket components to the present idea of allowing external agencies to use ISRO facilities.
  • NewSpace India Ltd (NSIL)
    • Additionally, constituted in March 2019, NewSpace India Ltd (NSIL), is mandated to transfer the matured technologies developed by the ISRO to Indian industries. All of them are under the purview of the Ministry of Defence.
    • Antrix Corporation Limited is an Indian government-owned company under the administrative control of the Department of Space. It was incorporated in September 1992, as a commercial and marketing arm of ISRO by prompting, commercially delivering and marketing products and services emanating from ISRO
  • Indian National Space Promotion and Authorisation Centre (IN-SPACe)
    • IN-SPACe was mandated the task of promoting, authorising and licensing private players to carry out space activities. As an oversight and regulatory body, it is responsible for devising mechanisms to offer sharing of technology, expertise, and facilities free of cost (if feasible) to promote non-government private entities (NGPEs).
    • ISRO shares its expertise in matters pertaining to quality and reliability protocols, documentations and testing procedure through IN-SPACe’s ‘interface mechanism’.
What is the significance of the creation of IN-SPACe?
  • Facilitator and regulator: IN-SPACe will act as an interface between ISRO and private parties, and assess how best to utilise India’s space resources and increase space-based activities.
  • Fair Competition: IN-SPACe will provide a level playing field for private companies to use Indian space infrastructure.
  • Better utilisation of space resources: Existing ISRO infrastructure, both ground- and space-based, scientific and technical resources, and even data are planned to be made accessible to interested parties to enable them to carry out their space-related activities.
  • Strategic benefits: ISRO, like NASA, is essentially a scientific organisation whose main objective is exploration of space and carrying out scientific missions. The private industry will also free up ISRO to concentrate on science, R&D, interplanetary exploration and strategic launches.
  • Widening the horizon of Private participation: IN-SPACe will promote private players in end-to-end space services, including building and launching rockets and satellites and providing space-based services commercially.
  • Reorients space activities: IN-SPACe will reorient space sector from a ‘supply-driven’ model to a ‘demand-driven’ one, thereby ensuring optimum utilization of the nation’s space assets.
  • Leveraging the potential of Young Country: So far only ISRO was doing all space related activities. Opening up of the space sector means the potential of the entire country can be leveraged
  • Boost to Space Start-ups: This will not only result in an accelerated growth of the sector but also enable India to generate large scale employment in the technology sector.
  • Additional revenue: ISRO can earn some money by making its facilities and data available to private players.
What is the way Ahead?
  • Need for new navigation policies: India has the SatCom policy and Remote Sensing Data Policy (RSDP) but they need suitable modifications for the purpose of IN-SPACe to perform its duty in an effective manner
  • Changes needed in New Space India Limited (NSIL): It needs to be recalibrated to transform its approach of a supply-driven model to being a demand-driven model for space-based services
  • Enhancing ease of doing space business: Space activities are multi-layered projects which involve a lot of intricacies across domains, such as gaining access to frequencies, licensing of satellites for operation, ability to export products, imagery
  • Updation of Space Regulation: Space legislation is needed for enabling coherence across technical, legal, commercial, diplomatic and defence goals.
  • India’s space vision also needs to address global governance, regulatory and arms control issues.

Mains Practice Question –Privatisation of Space industry helps in boosting our economic growth. Comment

Note: Write answers to this question in the comment section.


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