On Improving Private Sector Participation in Space – The next frontier

Source: This post on Improving Private Sector Participation in Space has been created based on the article “The next frontier” published in “The Hindu” on 23^rd February 2024.

UPSC Syllabus Topic: GS Paper 3 Science & Technology – Awareness in the fields of Space.

News: The article discusses the recent decision of the government to improve private sector participation in space by relaxing FDI limits.

Background:

Space exploration has financial, socio-economic, and geopolitical implications. In this regard, private sector players can complement national agencies, and lead the sector by identifying market opportunities and innovating rapidly.

What has India done in this regard?

1. State-led reforms opened India’s space sector to private companies in 2020.
2. Release of the ‘Geospatial Guidelines’.
3. Released of the ‘Indian Space Policy’, creating the Indian National Space Promotion and Authorisation Centre (IN-SPACe).
4. Telecommunications Act 2023 that provided for satellite broadband services.

What is the recent decision to improve private sector participation in space?

On February 21, the government took the decision to allow:

1. 100% FDI in the “manufacturing of components and systems/sub-systems for satellites, ground segment and user segment”.
2. Up to 74% FDI in satellite-manufacturing, operations, and data products.
3. Up to 49% FDI in launch vehicles, space ports, and their corresponding systems.

What will be the implications of this decision?

1. Raise Private Sector Participation: This will increase the contributions of private space flight operators, technology-developers, and application designers to the national space economy, in line with the Space Policy.
2. Ability to Compete with China: The decision gives India the ability to take advantage of China’s strained foreign ties to catch up with China’s more advanced position as a space power.
3. Investment in Indian Startups: Nw investments can add to India’s space economy by improving start-ups’ access to talent and capital, boosting local manufacturing, and improving investor confidence.

What should be the way forward?

The government must do the following:

a) Keep the regulatory environment clear.

b) Reduce red tape.

c) Increase public support.

d) Make it easy for Indian companies to access foreign markets.

Question for practice:

What are the decisions taken by the Indian government to improve private sector participation in space?