India and China are competing in the world economy for many things, one of them being the private space industry. There have been over 80 space startups in China since 2014, while India has a mere handful. India’s private space industry has also only raised about $20 million, whereas the Chinese have easily raised more than ten times that amount. In the race to occupy the global space market,
ThePrint asks: Can India be the next space startup haven or will it be China?
Country which gives incentives and makes business entrepreneur-friendly will have the most space start-ups
Co-founder, Dhruva Space
If you are just comparing the number of space start-ups in India vs China, then China is already way ahead. There are 15-plus space start-ups in China and the cumulative investment that these companies have raised is over $500 million. Few of these start-ups have already started demonstrating capabilities by either test firing next-generation launch vehicles or launching technology demonstration satellites. What is interesting is that a majority of these start-ups are home-grown.
On the contrary, the number of space startups in India is just a handful and have not yet been able to demonstrate capabilities in orbit nor have they been able to raise any significant amount of capital.
Which country will attract more space start-ups will depend on several factors. Some of them are the availability of skilled manpower, access to cutting-edge technology, cost of manufacturing, ease of doing business, potential clients in the domestic market.
Initiatives such as the starting of a space park by Kerala government with the support of ISRO to attract global space companies can actually be game changers. Exseed Sat-1 built by Exseed Space was the first Indian privately-built satellite to be launched into space. It demonstrated the capabilities of manufacturing satellites in India.
The country which takes steps to make business entrepreneur friendly, provides incentives to build local and sell global and removes entry barriers for new space startups will eventually have the most number of new space companies.
India and China both have a very top-down government-led approach to space activity
Co-founder of Dhruva Space, founder of NewSpace India
If not structurally, but in terms of execution, India and China have had a very top-down government-led approach to space activity. Both the countries enjoy a healthy base of human resource, infrastructure and the sector has the attention of policymakers. India declared space as a key part of the Make in India initiative and China threw open its government-run space programme to private sector participation.
India is now trying to create an ecosystem of start-ups with interest from independent state governments such as Kerala. The key difference between the two ecosystems is that the investors in China seem to have a bigger appetite for risk-taking and have invested over $500 million in their upcoming start-ups. The forecast for potential scaling opportunities for the private sector may be greater in China at the moment due to the integration of space as a key state-run initiative such as the Belt and Road Initiative or its military forces. This may allow Chinese private companies to catalyse their integration into their local economy as well as the global space economy.
Regardless of state involvement, there is tremendous opportunity for Indian entrepreneurs to create services that will use space-based products/services to help tackle problems in society. We shouldn’t be viewing space as building rockets and satellites alone, rather we should treat it as a tool that can help tackle challenges in agriculture, communications, banking, etc. One of the examples of this is SatSure, which uses satellite imagery along with other sensors to create useful analytics for the insurance industry to help settle crop insurance claims by farmers.
Not India or China, Montserrat is the haven for space startups
Co-founder and CEO of SatSure
It may seem that India and China may be in a race with each other to emerge as a space start-up haven, but neither of them has all the right ingredients that make it attractive for a space entrepreneur.
While India has common law, free markets and government flagship programmes like Startup India, the overbearing and omnipresent Indian Space Research Organization (ISRO) is both a strength and a weakness. Strength, because there is indigenous capabilities, weakness, because ISRO competes with all the other space players in the market, including space start-ups.
I have heard entrepreneurs often saying that they would not do anything to annoy ISRO because that would mean the death to their startup dreams, so, we all try to be politically correct and only say nice things. This prevents us from challenging the status quo and doing things radically different.
Another very important deterrent is the missing venture financing options for space companies. The venture capitalists just don’t understand the business cycles and risks of the space industry, and tend to stay away from such ventures. I am not even getting into the bureaucratic nightmare it is to get a company up and running in India. All attempts at space entrepreneurship in India are purely driven by the aspirations and enthusiasm of entrepreneurs, most of them are struggling to keep their company alive.
China, on the other hand, is a closed economy; you must not only be a Chinese company to succeed but also must have the blessing of the Chinese government. Most Chinese space startups mimic the business models of Western space startups.
Neither India nor China can be a haven for space startups. I place my bet on a tiny country with a nimble government, which understands the needs of the industry and is able to quickly and frequently adapt regulations to keep up with technology and business model advancements, a country which is already a signatory to various UN space treaties, and is willing to participate and invest in the success of its space startups. That country is Montserrat.
China is ahead now, but it’s only a matter of time before India catches up and moves ahead
Associate editor, ThePrint
Comparing space startups in India and China is like comparing apples and oranges. China is a closed system where private sector works in close quarters with the government and with the government’s approval as well. Work is divided and delegated there without the kind of hassles India faces.
In India, ISRO holds a monopoly over space. It is almost as if ISRO and private players are in competition with each other. But things are changing. ISRO not only has its own private vendors for launches these days, NewSpace India (smaller private satellite companies) is also starting to boom. There are many companies that provide satellite services to the government itself, while there are also companies that are independently doing their own thing (like launching a private satellite with SpaceX to serve worldwide ham radio).
The healthy competition between ISRO and private players can only provide better cooperation and more innovation in the future. While China will do what its set its mind to in space, India will eventually start doing way more than what is required by the government.
If the two really need to be compared, I’d say that China is ahead now but it’s only a matter of time before India catches up and moves ahead.
By Sandhya Ramesh, associate editor at ThePrint.
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