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Encouraged by high-profile successes elsewhere, India wants its private space companies to increase their share of the global launch market by fivefold within the next decade — an effort boosted by the personal support of Prime Minister Narendra Modi.

In the year after the country opened the way for private launches in 2020, the number of space startups more than doubled, from 21 to 47.

At the end of 2022, Skyroot Aerospace, whose investors include Sherpalo Ventures and Singapore’s GIC, launched India’s first privately built rocket into space.

“Many times initiatives get announced and they die. This is not one of those,” said Pawan Goenka, an auto-industry veteran who last year was named head of Indian National Space Promotion and Authorisation Centre (IN-SPACe), a newly created space regulatory body. “Space is one of the most favourite areas of our prime minister right now, one that he wants to see move.”

Investors poured $119 million (nearly Rs. 980 crore) into Indian space startups in 2022, up from a total of just $38 million (nearly Rs. 312 crore) in all the years up to 2017. They see a less-costly alternative to European launchers that are grounded or under development, as well as access to a bustling manufacturing hub, analysts say.

That has meant a boom for young space companies such as Skyroot and Agnikul Cosmos — which promise to slash launch costs for satellites — Satsure, offering satellite-data and analytics services, and Pixxel, which in March won a five-year contract from the US National Reconnaissance Office.

“It was a big surprise for all of us that the launch and the policy change all happened on time and we were able to meet our deadlines with complete support. We did not have a single day’s delay because of policy issues,” said Pawan Chandana, co-founder of Skyroot, which is valued at $163 million. (nearly Rs. 1,338 crore).

Other startup founders say the new approach means approvals come easier, stakeholders are aligned with each other, and there are more private industry veterans in government helping the sector.

There are challenges, however. The country accounts for just 2 percent of the space sector’s global revenue, estimated at $370 billion (nearly Rs. 30,38,720 crore) in 2020. Funding has only trickled in, as customers want to see successful launches before committing costly payloads to unproven designs.

“There are some very good companies, but at the moment, we are very behind the US or China,” said Prateep Basu, co-founder of SatSure. “Policy unlocking is very important, but the world will not take real notice until you do something remarkable like what SpaceX did.”

In the United States, the government-operated NASA handles space exploration while private companies do launches and build crewed vehicles. Proponents say that has lowered costs, but it also led to a multiyear gap in which Washington relied on Russian space vehicles to travel to the International Space Station.

SpaceX, which serves private customers and governments, conducted more than 60 launches in 2022 alone.

The Indian Space Research Organisation (ISRO) manages all of the country’s launch infrastructure, although Agnikul is planning its own launchpad.

“We realised the industry’s basic need is money,” said Jayant Patil, head of the launch vehicles committee at the Indian Space Association (ISPA), a quasi-government body that helps address private sector concerns.

Patil said the government is offering millions of dollars’ worth of seed funding to startups that use satellite data to boost India’s crop yields. Startups with potential military applications are vetted for government investment separately.

Kanchan Gupta, the Modi government’s senior adviser at the Ministry of Information and Broadcasting, said that the country could not afford to lag behind in the space race, and that “everything cannot be done by the government alone”.

“The whole idea is to provide policy stability, predictability,” Gupta said. “Letting the private sector know where the government comes in, where the government doesn’t come in, where they can get in, where they cannot get in.”

‘Self-sustaining’

The privatisation effort began with a late 2020 video conference call between PM Modi and executives, five people involved in the process say. Since then, PM Modi has made it clear he wants to sweep away red tape and create national champions, they say.

“The prime minister’s aim is to do with space what we have done with IT,” said one of the people, who declined to be named because the call and ensuing meetings were private.

ISRO will focus on exploration but still support private launch efforts, giving the country’s space startups global legitimacy, industry executives said.

The agency will work alongside an advisory panel – with members from In-SPACe, ISPA and NewSpace India Limited (NSIL), the government’s commercial launch arm — that helped the government announce a new, business-friendly regulatory framework in April.

Hindustan Aeronautics and Larsen & Toubro, which helped shape the privatisation policies, have a $100 million (nearly Rs. 821 crore) contract to deliver ISRO’s next launch vehicle in 2024.

“PM Modi is a technology person. So the suggestion is to hand over production and development to private players, while we look at technology. It then becomes a self-sustaining environment,” said S. Somanath, chairman of ISRO.

The country’s space companies also hope to find new customers as sanctions and political tensions have cut off Russia from much of the international launch market after the invasion of Ukraine, which Moscow calls a “special operation”.

The British satellite company OneWeb, for example, partnered with ISRO for a launch after Russia cancelled its launches.

“If you look at high technology, it is a matter of geopolitics… India definitely has some leverage right now,”said Laxman Behera, chairperson at the Jawaharlal Nehru University’s Special Centre for National Security Studies.

© Thomson Reuters 2023