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India’s Evolving Regulatory Framework For Private Space Companies

India is rapidly expanding its private space sector by introducing regulatory reforms and policy frameworks to encourage private investment and innovation. Through initiatives like IN-SPACe, NSIL, and the amended FDI policy, the country is fostering an ecosystem that enables startups to develop cutting-edge space technologies and compete globally.

Regulatory Framework For Private Space Companies

NewSpace India Limited (NSIL)

  • Establishment: Set up in 2019 under the Companies Act, 2013, to enhance private sector participation in India’s space programs.
  • Primary Role: A Public Sector Undertaking (PSU) under the Department of Space (DoS), responsible for producing, assembling, and integrating launch vehicles with the help of industry consortia.
  • PSLV Manufacturing: In 2022, NSIL called for full manufacturing of the Polar Satellite Launch Vehicle (PSLV), selecting a consortium of HAL and L&T to manufacture five PSLVs, with the first flight expected this year.

Indian National Space Promotion and Authorization Center (IN-SPACe)

  • Announcement: Created in 2020 under the Aatma Nirbhar Bharat Abhiyan to facilitate private sector participation in space activities.
  • Function: Acts as a single-window, independent agency to authorize, promote, and supervise private non-governmental space activities.
  • Industry Collaboration: Since its inception, IN-SPACe has signed 45 MoUs with private companies to support their space initiatives.

National Geospatial Policy

  • Initial Guidelines: In 2021, the government permitted private companies to acquire geospatial data and maps from government agencies without a license.
  • Policy Introduction: In 2022, the National Geospatial Policy was unveiled to encourage private sector involvement in collecting and utilizing geospatial data.

Indian Space Policy (2023)

  • Objective: Strengthens the private space sector by offering a legislative framework.
  • ISRO’s Shift: Facilitates ISRO’s transition from manufacturing operational space systems to focusing on research and development in advanced space technologies.

Amended Foreign Direct Investment (FDI) Policy (2024)

  • Satellite Manufacturing & Operation: Allows up to 74% FDI.
  • Launch Vehicles, Spaceports, and Associated Systems: Permits up to 49% FDI.
  • Satellite Components & Subsystems: Allows 100% FDI for manufacturing satellite components, ground systems, and user segments.

Importance of Private Sector Participation in Space Tech

  • Reducing Import Dependency
    • India’s space-tech import costs in 2021-22 were 12 times higher than export earnings.
    • Key imports include high-strength carbon fibers, space-qualified solar cells, and advanced electronic components.
  • Freeing ISRO from Ancillary Tasks: Private sector participation enables ISRO to focus on core research areas, including interplanetary exploration and strategic launches.
  • Shift from Supply-Driven to Demand-Driven Model: Space technology can support various sectors like urban planning through satellite data applications.
  • Enhancing Global Competitiveness
    • Companies like SpaceX, Blue Origin, and Arianespace have disrupted the space industry with cost-efficient models.
    • Indian private firms have primarily functioned as vendors to ISRO; the government is now enabling them to conduct end-to-end space activities.
  • Socio-Economic Benefits
    • Innovative space-based solutions can address key issues in agriculture, disaster management, and communication.
    • India’s space sector is projected to grow at ~48% CAGR over five years, reaching $50 billion.

Growth of India’s Private Space Industry

Rise in Private Participation

  • Over 200 space startups are leveraging ISRO’s testing, launch, and ground station facilities.
  • IN-SPACe: Provides regulatory and financial support, including a Rs. 1,000 crore Venture Capital (VC) Fund to accelerate sectoral growth.
  • Antrix Corporation: Facilitates satellite launches and technology transfers to private players.
  • PSLV Orbital Experimental Module (POEM): The program has increased startup payloads from 6 in 2022 to 24 in 2024.
  • MountTech Growth Fund – Kavachh (MGF-Kavachh): A SEBI-registered Alternative Investment Fund (AIF) under Category II, has facilitated Rs. 2,500 crore in venture capital funding over the past three years.

Breakthroughs By Indian Startups

  • GalaxEye: Developed the world’s first fusion of Synthetic Aperture Radar (SAR) with optical imagery for efficient data compression.
  • Pixxel: Building the most advanced hyperspectral satellite constellations (Firefly).
  • InspeCity (IIT Bombay): Working on in-orbit docking technology for satellite repair and refueling.
  • Skyroot & Agnikul: Developing cost-effective private launch vehicles.
  • Mission Prarambh (2022): Vikram-S, India’s first privately built rocket, was launched by Skyroot Aerospace.
  • Agnikul Cosmos: Successfully tested the world’s first rocket with a single-piece 3D-printed engine.
  • OneWeb India: Became the first company to receive IN-SPACe approval for satellite broadband services.

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