Space sector in India: Why state governments should play a role

Space sector in India needs decentralisation, privatisation.
For achieving the goal of contributing $50 billion to the Indian economy 2024, the space sector in India needs innovative policy changes.

By Arpit Chaturvedi and Abhinandan Khajuria

The space sector in India has steadily matured over the last seven decades. There has been a gradual increase in private participation for the development of the sector. The present well-developed formal space program can be credited to the efforts and policies of the department of space, government of India, and the Indian Space Research Organization (ISRO), India’s premier space organisation. The impetus for the new privatization policy is shaped by the establishment of Antrix Corporation, which is a government venture to utilise the commercial potential of the Indian space programme.

Along with it, New Space India Ltd (NSIL), also a government venture, has been established to work in the marketing and supply side domains of the space sector. In October 2020, IN-SPACe (Indian National Space Promotion and Authorization Center) was also announced to complement the policy of commercial space sector development. IN-SPACe is designed to act as a regulatory and facilitating agency for the space sector in India. There is also the National Space Transportation Policy 2020 in the pipeline as a draft which deals with building launch vehicles to deploy various types of satellites in space with the help of private players.

The government policy as well as institutional architecture developed around the space sector in India can act as a platform for growth and development in the sector. However, there is one aspect central to growth, especially economic and infrastructural growth that is missing or largely ignored for now in the Indian efforts to develop its space sector – that is the issue of decentralisation. Decentralisation here pertains to empowering the state governments to make laws in the field of space as an industry thereby broad basing the space agenda which currently falls exclusively under the purview of the Union government.

Global space economy is estimated at $360 billion with the upstream, midstream, and downstream sub-sectors pegged at $108 billion, $33 billion, and $219 billion respectively. The upstream and midstream categories are related to launch of space vehicles and operations respectively, while the downstream category is related to application of space technologies such as GPS and space imagery. It is the downstream category which is mainly where the commercial space sector operates in terms of value and returns.

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Potential of space sector in India

India has around 2% of the global space market with a valuation of $7 billion. This in context with the government’s aim of making India a $5 trillion economy would mean that the space sector in India needs to grow to be valued at $50 billion by 2024. This, in turn, translates to 48% CAGR in the space sector which can be made possible only if the private sector is involved to do much of the heavy lifting. Indeed, the downstream sector, also called the space application sector, is heavily dependent on private capital. Thus, we can predict the general direction in which the space sector in India is heading towards – privatisation.

Policymakers working for developing the space sector legislation and policies in India, do not consider the need for decentralisation as part of their strategic toolkit. The only active engagement of government with respect to decentralisation in space has been in the form of “space-based information support for decentralised planning” which intends to leverage space technologies for application in gram panchayats (village assemblies) as per the 73rd Constitutional Amendment of India.

Even in using space technologies for the development of rural areas, the policymakers have perceived of the gram panchayats as consumers of space technologies, but have not imagined state or local governments playing a role in setting rules for the space technology applications, ensuring compliance to those rules in their jurisdiction, providing impetus for infrastructural development or augmentation of the downstream space industry, or in deciding how the opportunities created by the space sector may be utilised based on the specific needs of the region. The Draft Space Activities Bill 2017, demonstrates a centralised way of policymaking.

The draft Bill covers everything ranging from commercial licensing, space object registry, liability of private entities, offences, national security etc. but it does not include provisions which mention the role that state governments can play in the development of the space sector in India. States like Karnataka, Tamil Nadu, Telangana, and Andhra Pradesh host private and public companies that contribute actively to the sector, yet no mention of how the state governments can contribute towards the development of the same is present in the policy.

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Small beginnings in Centre-state partnership

In India, space technology can be developed and utilised keeping certain sectors and regional requirements in mind. Some states may need it for disaster management, others for industrial development, and yet others for agriculture. In all fairness, there have been efforts from the central government to include state governments in the discussion. For example, The North Eastern Space Applications Centre (NESAC) located at Umiam, Shillong, is a “joint initiative of department of space (DOS) and the North Eastern Council (NEC) for carrying out space technology applications in the Northeastern region of India”.

There have also been several memorandums of understanding (MoUs) signed with the aim of execution of space application projects between the central agencies and state governments and their departments. However, the Union governments’ engagement with the state is limited to licensing and regulating a launch taking place within the territory of a state, and there is no expression of any role that the state government can play in developing, regulating, or facilitating the space sector in India whether in the Draft Space Activities Bill 2017 or in the National Space Transportation Policy 2020.

The Seventh Schedule of the Indian Constitution contains the Union list, state list, and the concurrent list. These lists include various matters over which the central and state governments can make laws and regulations. Space as a subject is not mentioned in the Union list (which contains matters upon which the union or the central government makes laws).

Likewise, space sector is not explicitly mentioned the concurrent list (matters on which both ethe central and state government can make laws on) or the state list (matters on which state government can make laws on). Article 248 of the Constitution of India deals with the residuary powers of the Parliament of India and under this Article, Parliament retains the power to make laws on the matters not listed in either of the three lists mentioned in the Seventh Schedule.

This Article gives power to Parliament to make laws related to space as a subject. By extension the policymaking related to the space sector lies under the domain of the Union executive. A constitutional amendment to add space as a subject matter in the concurrent list which could give both the Union government and state(s) the power to make laws on the subject of space related activities and thus pave the way for the state governments to make their individual space policies in consonance with the central government while at the same time tailored to their own regional needs.

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The way ahead

In the United States, for example, Title 51 of the United States Code have clauses that encourage state governments to facilitate “private sector involvement in space-related activity, particularly through the establishment of a space transportation-related infrastructure, including launch sites, reentry sites, complementary facilities, and launch site and reentry site support facilities”.

The Trump Administration’s National Space Policy, released on December 9, 2020 directs to “Encourage state and local governments to support the commercial space sector for the purposes of cultivating a technically skilled workforce, diversifying innovation potential, and stimulating economic growth” under the commercial space guidelines.

States like Texas and California have also enacted laws related to suborbital space liability which indicates the room for policymaking by the states in matters of the space related activities. Perhaps India could play a role in leading the global trend in bringing in state and local governments to actively participate in the space sector by making such provisions available in clearer and more unequivocal terms.

It should also be noted that there are risks associated with the implementation of decentralisation in the space sector in India. These risks are particularly related to national security and use of sensitive technologies. Complementary to this, the broader strategic goals of the Indian State with respect to space would also be a sensitive issue.

After all, as per the United Nations’ (UN) treaties and principles evolved under UN Committee on Peaceful Uses of Outer Space (UNCOPUOS) “any obligations of a State Party under international treaties on outer space activities are expected to be complied/ discharged through national mechanisms, namely “domestic space legislations” and even “non-governmental space activities are required to be licenced/ authorised and continuously supervised by a State (i.e. nations) in order to comply with treaty obligations”. Therefore, the Union government would be held accountable for any policy or action by a state government or a private player.

Further, decentralisation of space sector in India can also be construed as dilution by Indian national security apparatus. Thus, measures and checks should be put into place to mitigate such challenges and issues around accountability for national security and international treaties.

In final analysis, downstream services providing capabilities of the space assets such as GIS, geo-spatial data analytics, satellite-based communication services etc., are already being utilized by various startups based in different states of India. The state government can make laws for space sector setups in their jurisdiction and provide opportunities for growth, local youth employment, incubation services, leading to additional revenue generation, international cooperation etc. This can add to the State’s GDP and investment potential, providing overall economic growth.

Furthermore, competition among states for a piece of pie would also help spur innovation and increase R&D spending in space sector in India, which is a need of the hour. Politically, this would also become an avenue of cooperative federalism and Centre-state cooperation in a high value industry. Thus, for achieving the goal of contributing $50 billion to the Indian economy in 2024, the space sector in India needs innovative policy changes.

(Arpit Chaturvedi is the Co-Founder and Chief Executive Officer of Global Policy Insights (GPI), a centrist thinktank based out of New Delhi, New York, and London. Abhinandan Khajuria is a Global Policy, Diplomacy, and Sustainability (GPODS) Fellow at Global Policy Insights.)

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