A Trariti Consulting Group Study by Swapnil Roy
About the Space Industry
The space industry, also referred to as the "satellite industry," encompasses the financial activities involved in producing components that are launched into Earth's orbit or beyond, as well as the delivery of such components to their intended locations.
This sector comprises businesses that offer goods and services related to space on a broader scale, but it should not be confused with the concept of a "space-based economy," which involves activities such as asteroid mining, space trading, space manufacturing, space burial, and space advertising. The development of space-based industries is still in its early stages, but space applications are increasingly becoming an integral part of daily life. The use of satellite technologies is essential for practices such as weather forecasting, air traffic control, global connectivity, broadcasting, and emergency relief.
Although the space industry is smaller in size compared to other manufacturing sectors, its technological innovation and strategic significance suggest that it is rapidly gaining importance in contemporary society.
Divisions Within The Industry
The space industry comprises three distinct sectors: civil, national security, and commercial, each with its own goals and resources, but all relying on the same space industrial base, workforce, and infrastructure.
Civil space operations involve government-led activities not related to the military, such as satellite launches, scientific research, and space exploration. In India, the Indian Space Research Organisation (ISRO) oversees all civil space missions.
National security space operations involve military and intelligence activities, which are managed by the Ministry of Defence and various government departments and intelligence agencies. These activities aim to support military and law enforcement operations.
Commercial space operations involve private sector enterprises offering goods, services, and activities related to space to non-governmental customers, ranging from mapping services to research and development.
ISRO is the primary driving force behind India's space industry, with over 500 private suppliers and other Department of Space bodies involved in the sector. Founded in 1969 by Vikram Sarabhai, ISRO has become a vital space hub globally, with a valued space economy of $7 billion, approximately 2% of the global space economy. ISRO has completed numerous spacecraft and launch missions, as well as foreign satellite launches, making it a significant player in the global space industry.
The Paradigm Shift
Vikram Sarabhai, a scientist from the Department of Atomic Energy, realized in the early 1960s that space could play a critical role in India's development. He founded INCOSPAR, the Indian National Committee for Space Research, in 1962. The operations of INCOSPAR were later transferred to the Indian Space Research Organization (ISRO), which was established with the vision of harnessing space technology for national development while pursuing space science research and planetary exploration.
Professor Satish Dhawan took over in 1972 and provided ISRO with a clear direction by setting precise goals. He recognized that collaboration with other Indian organizations was essential for ISRO to remain relevant. Under his supervision, ISRO developed launchers such as PSLV, INSAT communication satellites, and IRS Remote.
The Indian Space Program has created strong relationships for both upstream and downstream activities, thanks to Dhawan's foresight. The Indian industry, including both heavy industries and MSMEs, has been tapped to produce critical components for launch vehicles and satellites. At the same time, ISRO has worked with end customers in communications, meteorology, and natural resource management to develop practical applications for satellites in these fields.
Previously, ISRO would procure various satellite parts from industries and assemble them into rockets at its Sriharikota spaceport in Andhra Pradesh for integration and launch.
The Indian government's recent announcement to boost private participation in space activities has electrified the space community. The government has allowed private actors to participate in the country's broader space program, including satellites, launches, and space-based services, as part of its structural reforms to rebuild the economy and make it more self-reliant and robust. This decision is being hailed as a paradigm shift in the space industry since it will allow private enterprises to participate in interplanetary and outer space adventures in the future, in addition to using ISRO's facilities and services.
The Union Cabinet recently approved the National Space Promotion and Authorization Centre (IN-SPACe) to ensure a fair playing field for commercial enterprises using Indian space infrastructure. IN-SPACe will serve as a single point of contact between ISRO and anybody interested in participating in or using India's space resources. This move will pave the way for a brighter future for private players in the space industry.
The benefits of these reforms are multifold. Firstly, IN-SPACe will provide private companies with a level playing field when using Indian space infrastructure. Secondly, ISRO can now focus more on new technologies, exploratory missions, and the human spaceflight program. An "announcement of opportunity" process will open up some of the planetary exploration missions to the commercial sector.
Thirdly, allowing companies and others, such as students, researchers, and academic organizations, more access to space assets will result in significantly better utilization of India's space resources. Fourthly, the proposed body would improve access to data and activities related to space assets, leading to the socio-economic usage of space assets.
Finally, it would enable the Indian industry to become a significant player in the global space economy, potentially turning India into a global technological powerhouse, with large-scale employment in the technology industry.
The space industry is currently undergoing vast structural changes, with the development of space activities in several countries, including global space powers like China, India, Japan, and other OECD nations, and a growing number of corporate players (New Space) investing in space systems and their downstream applications. This has resulted in several challenges and opportunities, and India's recent reforms in the space sector have placed it in an excellent position to capitalize on this evolving landscape.