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2 July 2020, Swarajya

Radical reform spurts space start-ups

The government’s recent reforms in the space sector have unleashed the imagination, innovation and potential of Indian space start-ups. Strong support from the private sector and inherent Indian technological aptitude will help them fuel India’s space ambitions and economic growth in the 21st Century.

Fellow, Space and Ocean Studies Programme

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The industry, unlike governments, seldom uses the word reforms. Improvements in industrial processes have different definitions. The meticulous Japanese put impetus on Kaizen (continuous improvement) and Hansei (self-reflection). The assiduous Americans emphasise Six Sigma and Lean Six Sigma (for reducing or eliminating errors).

Prime Minister Narendra Modi and his administration’s recent ‘space sector reforms’ fit within these four industry improvement concepts completely. The Modi administration and India’s nascent space start-up sector are the most spirited about the new space reforms, more than the fastidious Indian Space Research Organisation (ISRO) and the relatively impassive larger private corporations and conglomerates.

The fussiness by ISRO is because reforms are painstaking, particularly for a successful governmental organisation. The private sector is impassive because they have not yet articulated their game plan in the new level playing field, as some have learnt only to be ISRO’s diligent vendors. The apt spiritedness deserves a couple of paragraphs.

There could not have been an apt time to reform India’s space sector. The world order is in a tumult due to the COVID-19 pandemic and its side effects. Beijing’s growing adventurism along the Line of Actual Control (LAC), in the Sea of Japan and South China Sea is pushing China’s economic projections deeper than the abyss.

If Beijing’s manufacturing monopoly is to come to a screeching halt, at a time when the world is on the cusp of the fourth industrial age, countries such as the U.S., Japan and India will benefit, as they will expedite inventing ‘Industry 4.0’ technologies and manufacture them too. The geo-economic and geopolitical isolation, which Beijing has drawn itself into, has created immense opportunities for India. Large sections of India’s economy are bullish despite the short-term COVID-19 related slowdown. With the new space sector reforms, the Modi administration has opened up an uncharted economic territory with greener pastures.

India’s private sector has been given the latitude to innovate cutting-edge ‘Industry 4.0 space technologies’, manufacture them for ISRO and also make their mark in the global space economy. ISRO, on the other hand, has been encouraged to focus on the R&D for India’s spectacular space projects such as Chandrayaan-3, Mangalyaan-2, Gaganyaan and the Indian Space Station, all of which are scheduled for this decade.

In 2019, the Prime Minister’s Office (PMO) established New Space India Limited, a public-sector company, to trade ISRO’s spin-offs, and launch satellite services in domestic and global markets through the transfer-of-technology. However, the PMO perhaps has realised that merely opening this supply-side business out of ISRO is not enough.

India is also experiencing a technology start-up and a micro, small, and medium enterprises (MSMEs) boom, owing to the smoothening of policies set up under the Start-up India and Make in India programmes. The space start-ups are at present in preliminary, series A and pre-series A stages of private investments, and have shown tremendous promise on both the innovation and manufacturing front, at par with ISRO. They have way to go.

Being thriftily funded, they seek access to the expensive and state-of-the-art testing facilities that ISRO has accrued and developed while it was the sole user. The PMO’s decision (announced on 24 June 2020) to establish the Indian National Space Promotion and Authorization Centre (IN-SPACe) has facilitated the MSMEs and start-ups to access ISRO’s infrastructure, making way for demand-side businesses. The space start-up and MSME legion will only expand hereafter.

ISRO, over the years, has cultivated many diligent vendors from heavy-machinery, electronics, telecommunications, materials and specialty chemicals industries. The ISRO-vendor relations grew in an era when the gestation times for space technology were longer. Neither of them was geared for fast innovation nor have they felt the need for rapid differentiation. Their speed-to-market was easy-breezy, and profitability was not a penchant. The ISRO-vendor combine was indeed efficient, as is often reiterated in the media, when compared to less performing government liaisons.

After the recent space sector reforms, there is no stopping India’s large technology corporations and conglomerates from starting space R&D divisions or investing in promising start-ups and MSMEs. But are they ready? India Inc. is yet to use a new set of spectacles to view the space industry.

They should firstly realise that the space industry is not merely about satellites and rockets. There is an immense potential to enter the space industry via the information technology, automobile, specialty chemicals, electronics, banking and insurance, and aerospace verticals, which they have already excelled in.

For instance, Tata Motors and Mahindra & Mahindra have the wherewithal to extrapolate efforts from their autonomous vehicles projects to build rovers, radars, lidars, vision-pattern recognition etc., the way Audi, Toyota, Suzuki and Mercedes are doing for surface transportation on the Moon and Mars. Jio, Airtel and Idea can accrue means to build the sixth-generation telecommunications network spanning between the Earth, Moon and Mars. The Indian electronics industry can innovate and manufacture space-grade materials and semiconductors, such as ISRO’s new navigation-technology partner Qualcomm, after the government’s recent production-linked incentives, given to assembly, testing, marking and packaging (ATMP) units.

Likewise, aerospace companies such as Hindustan Aeronautics or Tata-Boeing can extrapolate their prowess on building aircraft to build the space station, spacecraft fairings, and the fuselages of space-planes. These are just the tip of the iceberg of immense space business opportunities.

India is moving towards a purple patch of innovation. It has been filing intellectual property, in certain domains, at a pace faster than ever. These successes come only with a strong sense of competitiveness in terms of speed-to-market. This attribute is a perfect match to what has been missing in India’s space sector to date.

With these factors working in India’s favour, it now depends entirely on the large corporations to assimilate and invest in Indian space start-ups. If they do not take them under their wings, the start-ups will progress to series B and C funding, and be picked up by overseas investors, causing attrition of domestic innovation.

The private sector has another reason to be upbeat as there is an entirely new and independent space agency rising unconnectedly in the backdrop – the Defence Ministry’s Defence Space Agency (DSA). The DSA, being a twenty-first century military space agency, will be outfitted to work with India’s private space sector. The strong private sector representation in the Mission Shakti project has already set a precedent. The two space agencies, one Yin and the other Yang, will foster continuous business for the private space sector, and keep progress and order in India’s space innovations and manufacturing ecosystem.

The umbilical of India’s economic growth in the twenty-first century is connected to outer space. The government, from the vantage point it is on, has realised this fact – Hansei – and carried out the indispensable reforms – Kaizen. The private sector should swiftly allow these space sector reforms to permeate their realms.

Chaitanya Giri is Fellow, Space and Ocean Studies Programme, Gateway House.

This article was originally published by Swarajya.

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