New Delhi: India today approved a proposal to allow private sector participation in the Space sector, an historic reform announced by the Narendra Modi government a month ago in a bid to kick-in self-reliance and technological advancement critical industrial activities of the country. The move could invite entry into the sector of companies such as the Larsen & Toubro and Tata Group.

The Union Cabinet, chaired by the prime minister, approved the far-reaching reforms in the Space sector, allowing the private sector to do business in the entire range of Space exploration and services activities.

India is among a handful of countries with advanced capabilities in the Space sector, conducting even commercial satellite launches using the State-run Indian Space Research Organisation (ISRO) capabilities built since the nation’s independence from British rule.

“With these reforms, the sector will receive new energy and dynamism, to help the country leapfrog to the next stages of space activities,” a Government of India statement issued by the Press Information Bureau said.

“This will not only result in an accelerated growth of this sector but will enable Indian industry to be an important player in global space economy. With this, there is an opportunity for large-scale employment in the technology sector and India becoming a global technology powerhouse.”

India had in 2003 opened up the defence and arms sector to private participation following a recommendation from the K. Subramanyam Committee that reviewed the 1999 Kargil war with Pakistan. Now, only the other strategic sector in nuclear energy is still under government control in India.

Key Benefits

Space sector can play a major catalytic role in the technological advancement and expansion of India’s industrial base. The proposed reforms will enhance the socio-economic use of space assets and activities, including through improved access to space assets, data and facilities, the government said as justification for the far-reaching decision.

The newly created ‘Indian National Space Promotion and Authorisation Centre‘ (IN-SPACe) will provide a level playing field for private companies to use Indian space infrastructure. It will also hand-hold, promote and guide the private industries in space activities through encouraging policies and a friendly regulatory environment.

The Public Sector Enterprise ‘New Space India Limited‘ (NSIL) will endeavour to re-orient space activities from a ‘supply driven’ model to a ‘demand driven’ model, thereby ensuring optimum utilisation of India’s space assets.

These reforms will allow ISRO to focus more on research and development activities, new technologies, exploration missions and human spaceflight programme. Some of the planetary exploration missions will also be opened up to private sector through an ‘announcement of opportunity’ mechanism.

Future Plans

India had allocated Rs 13,479.47 crore ($1.8 billion) as the budget for Department of Space in 2020-2021, an eight per cent increase from the previous year. The increase was fuelled by the new ISRO projects such as the Chandrayaan 3, Gaganyaan (human space programme), small satellite launch vehicle (SSLV) development and a new space port in Tamil Nadu, among others.

In 2019, ISRO was planning to increase its launches to at least 32, double the number it achieved in 2018, apart from major missions such as Chandrayaan-2, the country’s second lunar exploration mission after Chandrayaan-1 and Geosynchronous Satellite Launch Vehicle Mark-III (GSLV Mk-III) to carry three Indian astronauts to space in 2022.

India’s human space mission alone would require around Rs 10,000 crore ($1.3 billion). Though the human space mission is set two years hence, it would need funding this year to achieve critical development in the project plans.