Today's Editorial

Beyond Editorial:

• Under the amended FDI policy, the satellite sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector:
• Upto 74% under Automatic route: Satellites-Manufacturing & Operation, Satellite Data Products and Ground Segment & User Segment. Beyond 74% these activities are under the government route.
• Upto 49% under Automatic route: Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft. Beyond 49% these activities are under the government route.
• Upto 100% under Automatic route: Manufacturing of components and systems/ sub-systems for satellites, ground segment and user segment.

Sector specifics:

• Satellite manufacturing:
• There are collaborations between government agencies and private parties for manufacturing parts of satellites and their launchers; for instance, PSLV-C53 is the first official public–private collaboration for a space launcher in India.
• Satellite launches:
• Launch missions:
• With the Mars Orbiter Mission or the Mangalyaan 2013, India became the 1st nation to reach Martian orbit in its first attempt.
• Coming up, India is also launching the Gaganyaan, India’s Human Spaceflight Mission aiming to launch India's first crewed flight into space by 2024.
• Others, like Research satellites, Navigation satellites (NavIC) and even student satellites, are promoted by ISRO.
• Satellite launch services:
• India has two operational launchers: Polar Satellite Launch Vehicle (PSLV) and Geosynchronous Satellite Launch Vehicle (GSLV).
• NewSpace India Limited (NSIL) was established as the commercial arm of ISRO to move the commercial side of the space sector away from ISRO by creating demand from private players through technology transfer and aggregator economy models.

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

• It is responsible for promoting, enabling, authorising, and supervising various space activities of the non-governmental entities (NGEs) that include, among others, the building of launch vehicles & satellites and providing space-based services; sharing of space infrastructure and premises under the control of DOS/ISRO; and establishment of new space infrastructure and facilities.

Challenges faced by Space sector:

• The budgetary allocation to India's space sector is much lower compared to other countries.
• The unclear guidelines and authorization processes of IN-SPACe hinder private sector participation in the industry.
• The long-awaited Space Activities Bill is yet to be finalized.
• The domestic manufacturing of critical electronics equipment, sensors, payloads, and components is not up to the required level.
• Another challenge is developing a launch vehicle carrying six to eight tons of payload into the geostationary orbit.
• Currently, the GSLV Mk III vehicle's capacity is only four tons.
• The issue of space debris presents a formidable challenge in satellite launching and raises environmental concerns.
• Lastly, the Indian startup structure for the space industry faces a lack of financial investments and technology support in niche fields such as New Materials, AI, Additive Manufacturing, and Quantum.

Way forward:

• Building a vibrant space industry also requires comprehensive fiscal and non-fiscal incentives from the government, spanning taxes, capital access, R&D grants, guaranteed orders, export promotion and more.
• GST exemptions, lower tax rates on foreign capital, lower customs duties on raw materials/machinery imports, tax holidays for manufacturers, etc., are key to improving private project viability. Accelerated depreciation, higher R&D tax deductions, and deemed export status are other recommendations from the industry.
• On non-tax incentives, suggestions include early-stage grants for startups and augmenting Technology Development Fund Corpus, viability gap funding to set up test facilities, reservation of satellite transponder capacity over 5 years for private players, preference for Indian companies in public procurement tenders and Buy Indian guidelines.
• Regulatory updates like the Space Activities Bill, which is under finalization, should also incorporate liberal, growth-oriented provisions factoring in private sector requirements.