INDIA RESETS ITS STAR TREK PLAN
The launch of the Indian Space Association signals a partnership role for private companies in India's plans to recast the space ecosystem. EPISODE #45
Dear Reader,
A very Happy Monday to you.
Last week saw the birth of a new industry body: the Indian Space Association or the ISpA. In the normal course it shouldn’t merit anything beyond elementary curiosity. It caught my attention not because its inauguration was presided over by Prime Minister Narendra Modi. If anything his presence only reaffirmed the objective: to make private enterprise a key stakeholder in India’s commercial plans for space.
The fact that this happened only days after the sale of Air India to the Tata group, reiterated this government’s new resolve to walk a path which sees private industry as part of the solution and not the problem. Far removed from the era of “Tata-Birla ki sarkaar” slogans employed in the past to vilify businesses and their owners. More about this another time. Back to the India space story.
I see the creation of ISpA as another building block being put in place before the sector is formally opened up to the entire private sector. At present their presence is mostly as a vendor chosen by the Indian Space Research Organisation (Isro) for specific jobs.
Serious rewiring of the policy space was initiated last July when the government floated a draft Spacecom Policy. After a year of deliberations, the government is poised to announce the new policy. Last year the union government also created NewSpace India Limited (NSIL) to manage commercialisation of products and services generated by the Indian space programme—the cover picture this week, sourced from Isro, is the February launch of the Brazilian satellite Amazonia-1, the first commercial deal inked by NSIL.
Exactly why I draw your attention this week to the setting up of ISpA. It is no random event. Instead it is part of an elaborate plan to commercialise space operations in partnership with the private sector and thereby lend more fire power to the country’s ambitions.
A big shoutout to Kapil, Gautam, Premasundaran, Vandana and Aashish for your informed responses, appreciation and amplification for last week’s column. Gratitude also to all those who responded on Twitter and Linkedin. Reader participation and amplification is key to growing this newsletter community. And, many thanks to readers who hit the like button 😊.
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THE NEW SPACE POLICY
Last week the Indian Space Association (ISpA) was birthed at an event presided over by Prime Minister Narendra Modi. ISpA, an industry body for the space industry, is being positioned as a bridge between the government and the private sector as they join forces to chart India’s future plans in developing critical space technology for socio-economic gains, commercial applications and space-based services.
The larger game plan is similar to the highly successful playbook pursued by the National Aeronautics and Space Administration (NASA), an arm of the United States government, in collaborating, incubating ventures with private enterprise in space sector projects. The government’s move is also a tacit acceptance of the new reality where space tech has already permeated our daily lives—every time you operate an ATM you use a very small aperture terminal or vSAT based on a satellite network—and that it is only going to grow from here.
So the creation of ISpA is is to be seen as another step in rebooting India’s space programme to align it with the new reality. Besides the existing set of private players already associated with the Indian Space Research Organisation (Isro), new members of ISpA include Bharti Airtel, Nelco (Tata Group), Mapmyindia and Alpha Design Technologies.
The PM’s presence at the event clearly demonstrates that the government sees a special role for the new body—clearly the first among equals among existing trade bodies representing space and satellite companies—providing heft to the private sector in the emerging ecosystem for space projects.
To put it simply the private sector in general and the start-ups in particular are being empowered in an unprecedented fashion to pursue commercial applications in the space sector. The proposed ecosystem entails a huge pivot wherein the private sector trades-up from being mere vendors to Isro to partners in future space projects.
PM Modi spelt out this change unambiguously in his address at the launch event.
“Today is the day the Indian space sector receives new wings. For 75 years since independence, Indian space has been dominated by a single umbrella of Indian government and government institutions. Scientists of India have made huge achievements in these decades, but the need of the hour is that there should be no restrictions on Indian talent, whether it is in the public sector or in the private sector. In a way, the country has given a new gift to the talent of India's entrepreneurs by opening up India's space sector in its 75th year of independence. Let this collective power of India’s population take the space sector forward in an organized manner. The Indian Space Association (ISpA) will play a huge role in this.”
Interpreting the PM’s remarks it is apparent that the country is seeking to leverage the fantastic foundation developed by Isro. Working against all kinds of odds—including crippling international sanctions following the first nuclear test in 1974—generations of dedicated scientists at Isro have not only developed cutting edge technology but also managed to commoditise the business of building rockets and satellites.
A brief aside is that I wrote about India acquiring satellite launching capabilities when I started out in journalism in the mid-1980s. At that time the only other players in the business of satellite launches were the United States, the then Soviet Union, France, United Kingdom and China. Brazil along with India were among the two upstarts—the cover photo tells us the story about how the race went down.
The glittering history of Isro in the last four decades clearly ensured that India carved out its own special place in the big league. And they were able to generate impressive value for money in every space project without ever compromising quality. This includes 100-plus satellite missions, 70-plus launch vehicle missions (including the ones to Mars and the Moon) and the ongoing plan (Gangayaan) to send Indian astronauts into space.
Going forward however Isro will have to scale these abilities exponentially as the race for space heats up. Further, cost is not going to be the only differentiating metric. Instead, innovation will be the key to India acquiring the desired capability and competitive edge at the global level.
And in this it is the government’s faith that a partnership with the private sector will generate the results. They see it as a win-win: At one level Isro refocuses on its core abilities and at another the private sector concentrates on innovation and saves huge costs by tapping into Isro-owned space infrastructure.
Cost vs Innovation
Upfront this government was quick to recognize that the existing Satcom Policy—issued in 1997—was outdated. Especially since the name of the game in space business has been turned on its head in the two decades since. An earlier attempt to effect course correction with the draft Space Activities law in 2017 was quietly abandoned.
The big vision was to find a nimble partner to complement Isro’s heavy lifting abilities to improve Indian capabilities and get a larger piece of the global space business valued at about $350 billion—at present India accounts for 2% market share. And to do this without losing any more time.
The imperatives are greater when we consider that most of space tech is dual use in nature—it can be used for peaceful purposes and be weaponised. For instance the ability to launch ballistic missiles (On Sunday China test launched a hypersonic missile which circled the world before hitting its target.) is influenced by the capability to manufacture and launch rockets. In short both defence capabilities and socio-economic benefits are at stake in the emerging space order.
Enter the draft Spacecom Policy, which now awaits formal clearance from the Union Cabinet. Broadly the policy will regulate the commercial use of the space ecosystem, including use of satellites and also define the rules for foreign direct investment in this sector.
The big policy shift is that the private sector will go from being just a vendor to a partner of Isro in space projects. The bet is that this will inspire innovation, especially among start-ups in the space communication industry. It is probably the reason why the PM lent his social capital to ISpA in what was a very high profile day-long event. It will be a mistake though to see this in isolation.
In the run-up to the launch of ISpA the government had set up the Indian National Space Promotion and Authorisation Centre (IN-SPACe)—not without controversy as it ran into some resistance from within Isro—to ensure smoother coordination with the private sector as and when they were drafted as partners for future space projects. The new entity is to oversee permissions and regulation to private companies and the sharing of space infrastructure developed by Isro.
Earlier in 2019 the government set up NewSpace India Limited (NSIL) to optimise the ability of the Indian space sector to provide space-related services and products to international clients. As I mentioned in the introduction the first successful execution of a commercial deal by NSIL was the launch of the Brazilian satellite early this year. Clearly the intent is to develop a new ecosystem around Isro, but with key functions like commercialisation of projects/services and management of the space infrastructure farmed out to new entities—such that coordination and partnership with the private sector is streamlined.
The Opportunity
Due to Isro’s ability to successfully and repeatedly launch satellites, the general perception is that this makes up bulk of the skills in the space sector. Undoubtedly, the ability to launch satellites is a humongous achievement and a necessary condition. Yet applications using the satellites and in cloning the learnings and processes from these projects for non-space related sectors are equally valuable—and increasingly this is becoming the cutting edge of global competition.
While we are already familiar with the applications based on the ability of satellites to observe the earth and its environment—including its use for weather forecasts and bolstering strategic interests—what we often overlook for instance, is that a new generation of nano-satellites are redefining and creating new applications.
The good news is that several Indian startups are already up and running even before the final policy pegs are in place. The range, ambition and enthusiasm of these startups are so impressive. Not surprisingly therefore they are beginning to draw funding support; an industry insider says that this has accelerated in the last two years and it is likely to have topped $40 million. Matter of time I guess before the space sector throws up the next Unicorn from India.
Take Bengaluru-based Pixxel for example which harbours global ambitions. It is partnering with Isro to launch a network of small earth imaging satellites to detect, monitor and predict global phenomena on an almost real-time basis. To do this it proposes to use its satellite network to obtain hyperspectral imaging—in lay language this means collecting hundreds of images of the same location, which are then mined by computers to generate the desired information.
Similarly we have SatSure with a footprint spread over Switzerland, India and Australia which combines satellite imagery, social and economic data to offer insights to clients in several sectors including agriculture. These are but two random examples in what is a rapidly growing list of startups in space business.
It will be interesting to see if the new ecosystem can indeed coax the desired levels of innovation. Because as of now literally sky is the limit for the aspiring private sector players in Indian space projects.
Recommended Reading
My monthly column in Economic Times last week was focused on what I believe to be another freedom at midnight moment for India. This time it is about the country’s birth as a data democracy and how it is unleashing profound changes.
Sharing a partial screenshot below:
I argue that, among other things, this democratisation of data is enabling high-volume, low-cost, low-value transactions setting in motion a new process of inclusion through credit empowerment. These digital transactions are creating first time credit histories for a generation of borrowers who could never access formal credit. If you wish to read please click this link.
Felt very chuffed when Nandan Nilekani, the architect of Aadhaar which is driving the new found success with inclusion, flagged the column on twitter—sharing the link below. The amplification is welcome as now more people can weigh in on a conversation capturing this profound makeover of India. 😊
You may have already read the column in the Economic Times. In that case apologies for the replug.
Till we meet again next week. Stay safe.
Dear ANIL.
Its great to read about new developments taking place in the country besides the murky politics.After years of missed opportunities, the govt of India has finally opened doors to the vast untapped opportunities of private sector participation in our space program . The far reaching reforms in the space sector in the entire range of space activities will help to make India self reliant in space technology.. It will also attract foreign investment in the satellite communication sector.. We need to create a flexible, technology neutral and competitive regime, keeping in mind the international developments and social and economic needs of the country.
Very encouraging development and I am indebted to this weekly column from Anil, as it keeps me abreast of developments, which otherwise may have come to my notice much later. The decision to involve the private sector in this high tech field is perhaps with a foresight for a far more rapid development in the field, as it will mobilise greater financial and intellectual capital. After all technology is also a race for who has it first. Further, with the existing threat of military attacks from space in the future, India cannot afford to be left behind.