Daily News Analysis

Space Economy

stylish_lining

Why in the News?

The Indian Union Budget for 2024-25 announced the establishment of a ₹1,000 crore venture capital fund aimed at boosting the space economy in India. This fund is intended to support space tech startups and small- to medium-sized enterprises (SMEs) throughout their lifecycle.

More on the News

  • Purpose: The venture capital fund will provide financial support to space tech startups and SMEs at various stages of development.
  • Complementary Initiatives: It will build on existing initiatives like the Seed Fund Scheme launched by the Indian National Space Promotion and Authorization Center (IN-SPACe) in 2023.

Need for Promoting Space Tech Start-ups and Private Sector

  • Reducing Import Dependency:
  • Current Situation: India imports space technology components that are 12 times more costly than the earnings from exports (2021-22). These include components like high-strength carbon fibers and space-qualified solar cells.
  • Goal: Reduce import costs by developing domestic space tech capabilities.
  • Freeing Up ISRO Resources:
  • Focus Shift: Encouraging space entrepreneurship will allow the Indian Space Research Organisation (ISRO) to concentrate on core R&D activities such as interplanetary exploration and strategic launches.
  • Shifting to a Demand-Driven Model:
  • Sector Integration: Space technology integration benefits almost every major sector, from urban development to disaster management, through satellite data.
  • Global Competitiveness:
  • Foreign Players: Companies like SpaceX and Blue Origin have revolutionized the global space industry with cost-effective solutions.
  • Indian Private Sector: Indian private firms have largely been vendors for government programs; thus, enabling end-to-end space activities will help them compete globally.
  • Socio-Economic Benefits:
  • Innovations: Space tech can address challenges in agriculture, disaster management, and communication.
  • Growth Projection: The Indian space sector is expected to grow at a ~48% CAGR over the next five years, reaching $50 billion.

Private Sector Participation in Space

  • Startups: Over 200 space-based startups are currently active in India.
  • Milestones:
  • Vikram-S: India's first privately built rocket, launched by Skyroot Aerospace.
  • NSIL and HAL Partnership: An MoU was signed for producing PSLVs.
  • Agnikul Cosmos: Test-launched a 3D-printed rocket engine.
  • OneWeb India: Received approval for satellite broadband services from IN-SPACe.

Challenges in Promoting Start-ups and Private Sector Participation

  • Regulation Issues:
  • Multiplicity of Regulations: Startups face a maze of approvals from multiple agencies (DoS, ISRO, Antrix Corporation).
  • Regulator vs. Operator: ISRO’s dual role as both regulator and operator creates conflicts of interest.
  • Risky Nature of Industry:
  • Market Uncertainty: Long incubation periods and lack of a guaranteed market make space ventures risky for investors.
  • Funding Constraints:
  • Investor Preferences: Indian investors often prefer safer investments over high-risk space tech ventures.
  • Cost Issues: Reliance on imported materials increases costs and delays.
  • Security and Strategic Concerns:
  • Risks: Increased private sector involvement raises concerns about foreign interference and security.
  • Other Challenges:
  • Talent Pool: Limited skilled workforce.
  • Space Debris: Growing space activities increase space debris.

India’s Initiatives to Promote Space-Tech Entrepreneurship

  • Key Organizations:
  • IN-SPACe: Regulates and promotes private space activities in India.
  • Antrix Corporation Limited (ACL): Handles commercial activities of ISRO.
  • New Space India Limited (NSIL): Manages ISRO's commercial endeavors.
  • Indian Space Association (ISpA): Industry body for private space sector development.
  • Key Initiatives:
  • Indian Space Policy 2023: Allows full participation of non-government entities in space activities.
  • FDI Policy: Allows up to 74% FDI in satellite manufacturing and 49% in launch vehicles and spaceports.
  • SpaceTech Innovation Network (SpIN): Encourages public-private collaboration for space startups.
  • Tax Benefits: Satellite launches are exempt from GST.
  • Atal Innovation Mission (AIM):
  • ATL Space Challenge: Encourages students to tackle space sector challenges.
  • AIC Scheme: Supports startups in UAVs, drones, space debris tracking, and more.
  • Mentoring: Access to retired ISRO experts for guidance.

Way Forward

  • Enact Space Activities Act:
  • Purpose: Provide legal clarity and impetus for the industry.
  • Mapping Value Chain:
  • Action: Identify challenges and trends, and facilitate government contracts for private startups.
  • Capacity Building:
  • Programs: Invest in academic and training programs for skills in systems engineering.
  • Building Synergy:
  • Partnerships: Foster collaborations between startups, ISRO, and international companies.
  • Other Measures:
  • Funding: Increase the Technology Development Fund Corpus and viability gap funding.

By implementing these measures, India aims to strengthen its space economy, enhance private sector participation, and position itself as a competitive player in the global space industry.

UNESCO

UNESCO's executive board has recently nominated Khaled el-Anani, the former Egyptian Minister of Tourism and Antiquities, to be the next Director-General of the organization. About UNESCO:
Share It

Visakhapatnam Declaration on e-Governance

The Visakhapatnam Declaration on e-Governance marks a significant step in the development of digital governance in India, emphasizing inclusive, transparent, and citizen-centric practices. Adopted
Share It

Defamation in India

Recently, a Supreme Court judge raised concerns about the increasing misuse of defamation laws by political figures and private individuals to settle personal and political disputes. The judge sug
Share It

Simultaneous Elections

India's ongoing debate about simultaneous elections or the One Nation, One Election concept has gained momentum, with experts like Arvind Panagariya, Chairman of the 16th Finance Commission, e
Share It

Shanghai Cooperation Organisation (SCO) 2025 Summit

The 2025 SCO Heads of State Summit was held in Tianjin, China, marking a significant moment for the organization’s expanding role on the global stage. Key Highlights: Terrorism:
Share It

Production Gap Report 2025

The Production Gap Report 2025 reveals a troubling trend: many countries are planning to increase fossil fuel production well beyond the levels needed to limit global warming to 1.5°C as per t
Share It

India's Roadmap for Fusion Power

India's Institute for Plasma Research (IPR) in Gandhinagar has recently proposed a comprehensive roadmap for the development of fusion power, marking a significant leap towards harnessing fusi
Share It

Dhvani Missile

India's Defence Research and Development Organisation (DRDO) is on the verge of a historic milestone with the upcoming test of Dhvani, a next-generation hypersonic missile that is set to prope
Share It

Global Innovation Index (GII) 2025

India has made remarkable strides in the field of innovation, moving up from 48th position in 2020 to 38th in 2025 among 139 global economies, according to the World Intellectual Property Organiza
Share It

Critical Minerals

India’s first auction of deep-sea blocks for the extraction of critical minerals has been delayed indefinitely after receiving a poor response from bidders. This auction was expected to be a
Share It

Newsletter Subscription


ACQ IAS
ACQ IAS