India’s private space sector is rising, but wait for Bezos-like ‘joy rides’ will be longer

India's space sector, dominated by ISRO, has seen a boom in private companies in past 3 years. But there are still many challenges to overcome, including flawed policy-making.

Illustration: Manisha Yadav/ThePrint

Bengaluru: Jeff Bezos, the world’s richest man, made headlines for his journey to space this year, garnering much criticism. Several lambasted the Amazon founder for his expensive “joy ride”. Beyond the controversy, however, is evidence of how far private players and companies have come within the space sector in the US.

​India too has seen a boom in private companies entering the space industry in the last three years, setting the stage for a competitive market to emerge in the country in the near future. 

However, the road to that future is long. India’s space sector accounts for a minuscule 2 per cent of the $440 billion global industry. Moreover, the sector is largely, if not entirely, public.

While the government’s Department of Space is trying to push the private players in the sector, bringing in draft legislations, and setting up aid, experts say there is still time before the industry can achieve its potential.

ThePrint also reached the Indian Space Research Organisation (ISRO) for comment via email but did not receive a response until the publication of this report.

​The rise of private players in India’s space programme

Private players have been engaged in various supportive roles with the Indian Space Research Organisation (ISRO) from very early days, explained Narayan Prasad, Chief Operating Officer of Satsearch, a search engine for the space industry, and formerly the chief executive and co-founder of Dhruva Space, a company engaged in the development of small satellites.

Companies like Godrej and Andhra Sugars partnered ISRO in the early days, and are described as the first generation of private players.

“[These were] businesses that took pride in supporting the country in its journey of building a space programme, more than profit, because there was not really a lot of money coming in then,” says Prasad. 

These years marked only a handful of satellite launches. But in the late 1980s and early 1990s, following a slew of successful satellite launches, India’s space programme witnessed its “build to print” revolution, i.e., contract manufacturing wherein products are built according to client specifications.

Among the first private companies to arrive on the scene were Ananth Technologies, and Centum Electronics, which have been dubbed as the “brick and mortar” companies of the space sector. Ananth Technologies has been manufacturing satellite systems and subsystems for ISRO since 1992, while Centum Electronics has been designing and developing electronic components for satellites and rockets since 1994.

“I was a part of ISRO,” says Dr Subba Rao Pavuluri, founder of Ananth Technologies. “I left midway because of the encouragement they gave me that things can be done in the private sector to serve ISRO and also grow independently.”

He says nearly 500 private players have been supporting ISRO since the 1960s. “They didn’t just buy components, they trained the people, qualified the facilities, and were involved in every aspect of the development of these companies. Then they will depend upon them for the supplies. So, that’s how the entire process was created,” Pavuluri says.

Beginnings of New Space

​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 1998, after India’s underground nuclear tests, the US had imposed economic sanctions, which barred the export of defence and technology material, with satellites falling under the embargo as well. Sanctions were also imposed on nine Indian space and defence organisations.

ISRO, meanwhile, started to fly international satellites in 1999, with the first few customers being Germany, Belgium and Indonesia.

“Most satellites were flown from European and Asian countries with whom India has good bilateral relations,” Mohanty tells ThePrint. “But two big players, US and Japan, were missing from the list of foreign payloads flown on the PSLV up until 2008.”

This was not owing to the economic sanctions alone. The International Traffic in Arms Regulations (ITAR) of the US, formulated in the 1960s during the time of the Cold War, has also been in place, regulating the manufacture, sale, and distribution of defence and other space-related articles. Effectively, US commercial satellites were barred from being launched in India.

Mohanty recounts that between 2009 and 2015 she held a series of informal talks with diplomats in Washington as well as New Delhi, with the hope of facilitating Earth2Orbit’s client, US-based SkyBox Imaging, to launch satellites on ISRO’s PSLV.

“Given the US embargo and the fact that the US was pushing India to sign a Commercial Launch Services Agreement (CLSA), India was quite wary. In my conversation, we discussed how US satellite makers could benefit with access to the PSLV and how the PSLV could benefit by having access to the robust US launch market,” Mohanty says.

The challenges were many, and it took Mohanty three years of “soft diplomacy” to convince the US State Department to agree to allow a satellite of Skybox to be flown aboard PSLV within ITAR protocols. 

In 2015, four satellites of US-based analytics firm Spire became the first US commercial satellites to be launched by an Indian launch vehicle. A year later, in 2016, another Skybox satellite called SkySat3 flew on the PSLV.

A scam that changed the scene

​But things took a turn for the worse a month later, when an international tribunal produced a judgment against the commercial arm of ISRO, Antrix Corporation Ltd, which entered into these launch agreements.

Devas Multimedia, a Bengaluru-based telecommunications firm supported by retired ISRO employees, had made a deal with Antrix in 2015 to lease the S-band satellite spectrum meant for satellite-based communication. In 2011, the Congress-led government cancelled the contract following a report by the Comptroller and Auditor General that had found irregularities in the standard operating procedures.

This came to be known as the Antrix-Devas scam, and the Hague-based International Chamber of Commerce tribunal ruled that Antrix’s actions “constituted an expropriation”.

Madhavan Nair, a space scientist and the ISRO chairman at the time, says the entire controversy was a misunderstanding at the government level, followed by a hasty decision by the then UPA government.

“The allegation was that ISRO sold the spectrum at a lower value. But the fact is that ISRO did not sell the spectrum, we only had a contract to lease out transponder capacity. Without understanding this, the government took a hasty decision to save face during the 2G scam, as the Department of Space is headed by the prime minister. It cancelled the contract with Devas and ended up incurring fines that ran into millions,” Nair says.

Nair was subsequently removed from office along with three senior officials.

​​“It held the industry back by 10 years and confidence in the ISRO leadership at every level was shaken… people’s ability to open within the industry died a little and has taken a long time to recover,” Prasad notes. 

“Antrix was at the peak of its performance before the controversy,” says Nair. “Since then, it hasn’t done much. Companies and customers are now likely to be cautious when signing agreements.”​

​It wasn’t until two years later that Antrix signed a contract to launch a moon lander for its first Indian private customer, TeamIndus. However, this chapter didn’t end well either.

Indian private players’ history with ISRO

In 2015, TeamIndus was among the five finalists for the $30 million Google XPrize Lunar Prize, an international competition for privately-funded companies to be the first to land a rover on the moon. It was awarded interim prize money of $1 million for demonstrating its proposed landing system, and it signed a deal with Antrix in 2018 to launch its rover to the moon.

​However, Antrix ended up cancelling the contract, stating that TeamIndus did not have the financial capital to complete its testing and launch processes. Eventually, the competition itself ended with no winners as all companies failed to meet the launch deadline of 31 March 2018.

​Today, TeamIndus is continuing to build “platforms for mobility, orbital and landing systems”, but their lack of success but their lack of success then dampened the enthusiasm among domestic investors who were already struggling to understand the space value chain, Prasad explains.

International investors, wealthy individuals, and venture capitalists entered the mix around the same time, propelling a growth in investment alongside capital from high-net-worth individuals. This led to start-ups like AgniKul Cosmos, Skyroot Aerospace, Pixxel, and Bellatrix Aerospace seeing substantial growth.

Challenges for Indian players

Experts say the road to liberalisation of India’s space sector has been filled with challenges, including flawed policy-making and lack of domestic investors. A big reason is that even though New Space companies are mushrooming, the sector remains monopolised by ISRO, leading to lack of access to a market.

According to Prasad, there are about 50 companies in the sector today that are working in the “downstream” segment, which uses space technology to develop an application, product or service, and “upstream” segments that are focused on sending objects into space and space exploration. Two-thirds of companies are working in the downstream segment.

For instance, Kawa Space, a space tech company, is working to make satellite data accessible so it can be used for a variety of purposes, including agriculture and demographic assessment.

Blue Sky Analytics, a geospatial data intelligence company, catalogues environmental datasets using satellite data. Companies like Skyroute Aerospace, AgniKul, Digantara, and Bellatrix are involved in the more capital-intensive segment of building rockets and satellites.

But despite the boom in newer companies, the industry is still dominated and monopolised by ISRO, explains Ranjana Kaul, a Delhi-based advocate who specialises in the international law of outer space.

“I don’t see anything from any governmental bodies or Department of Space about enlargement of the private sector in outer space activities, which is where a lot of our young start-ups want to expand, like building and launching satellites and providing services from orbit,” Kaul says.

Enabling more private participation requires full cooperation of the publicly-funded space agency, which has only initiated early talks.

There is also a lack of data around this rising sector. “There is no way of gauging how many jobs are being created in the country through this, the sector’s contribution to GDP, number of engineers employed, exports being done, amount of taxpayer money within the system, or even evidence that these things are improving, which will help with the policymaking,” Prasad says.

However, satellite industry body Satcom Industry Association’s chairman, Subba Rao, doesn’t concur. “Many start-ups have been working on new technologies and the new ways of doing business in the space sector. That’s the most welcome step … but if I were to put numbers into an economy immediately, that’s going to be very difficult,” Rao says.

“When I started out, I also faced similar resistance and challenges. For example, the banks wouldn’t come forward to support us … a lot of start-ups will eventually contribute immensely. We can’t calculate all this today itself,” he says.

Lack of institutional support and policy​

India’s still-nascent space programme has made tremendous engineering strides by sending technology demonstrators to the Moon and Mars, and establishing a reliable launcher. The agency is also working on the upcoming human spaceflight programme. 

But more mature space agencies like the US’s National Aeronautics and Space Administration (NASA), China’s China National Space Administration (CNSA), and Russia’s Roscosmos, are sending humans to space, and spacecraft to far reaches of the solar system and outside, performing sophisticated extra-terrestrial scientific missions.

​Much of the support to such plans in these countries has come from private players, like Boeing and SpaceX, who have partnered the governments in various capacities. 

Facilitated by a conducive ecosystem, these economies use the private sector for complex operations beyond manufacturing support, such as sending crew and supplies to the International Space Station.

For instance, NASA awards a part of its annual budget to invest in and work with private players. Following this path, China is also seeing a boom in New Space companies heavily invested in and supported by the state, especially in the last few years.

Although ISRO has a long way to go, the agency has started taking the first steps to engage with and support a private peripheral ecosystem. 

Among the changes brought about by the government in the sector was the formation of Indian National Space Promotion and Authorisation Centre (IN-SPACe) in 2020, to be a nodal agency bringing in private players to the sector faster. It was set up primarily to aid private companies access the Indian space infrastructure i.e., ISRO’s facilities, and engage in building and launching rockets and satellites.

In March 2019, the Centre established the public sector undertaking NewSpace India Ltd (NSIL), and tasked it with transfer of small satellites technology, transfer of production of the PSLV, and transfer of the marketing of associated technology to the private sector. The company effectively replaced Antrix, according to Nair.

​NSIL secured and successfully executed its first commercial deals this year.

However, Kaul points out that there is no specific comprehensive legislation that governs the current ecosystem, and private players are hard-pressed for governmental funding as well as conducive policy options in the country.

“To date, I have not seen a policy document from the Government of India… I don’t see anything in the Department of Space mandate about the enlargement of the private sector into outer space activities,” Kaul says. 

Currently, space legislation in India includes a few regulations like the Satellite Communication Policy, 2000 (SATCOM), which expanded the wireless spectrum, and the Remote Sensing Data Policy, 2011 (RSDP, 2011), which allows the government to censor satellite data if deemed a threat to national security. 

Last year, however, ISRO came out with the Draft Space Based Communication Policy of India – 2020 (Spacecom Policy – 2020), Draft Space Based Remote Sensing Policy of India – 2020 (SpaceRS Policy – 2020) and Draft Norms, Guidelines and Procedures for Implementation of Space RS Policy – 2020 (SpaceRS NGP – 2020), inviting members of the industry and public to contribute their opinions.

Provisions in the first proposed legislation aim to “promote participation of commercial Indian industry” in the sector. The latter two also deal with aspects around the commercialisation of space technology.

However, experts highlight that the Department of Space doesn’t have people specialising in space policy who can assist in the framing of such legislations.

“When suggestions are thrown open to private players, it is important to remember that there is a lot of money to be made through contracts,” Nair says.

“Everyone is motivated by the success of a company like SpaceX, but Elon Musk also made billions through NASA contracts. It is also a matter of national security; even if private players can fly, they will have to be monitored centrally, as it’s done everywhere else. So these policy suggestions need to be assessed within the government by those who understand the funding, the sector and the industry. The department is not equipped to do that right now,” he adds.

Prasad agrees. “The government demand for services, like monitoring crops or using weather sensors, needs to be exposed to the private sector like any other part of the world. We already do this for telecommunication. But you have a bunch of engineers who are turned into lawyers and policymakers who probably don’t understand how commercial space works within India or outside, in the end.”

(Edited by Amit Upadhyaya)