Introduction

IResearch Organisation (ISRO), a government institution under the
Department of Space (DoS), has piloted all Indian activities in the space
sector since its inception in 1969. The Indian space programme has had
many successes in the five decades since it was envisioned, but no private
turnkey solution provider has emerged out of the Indian space industry,
both in the space and launch segments.
The current space value chain of India is predominantly driven by ISRO
in both the upstream (satellite manufacturing, launch vehicles, Earth
station setup) and downstream (data products, provision of SatCom
capacity, ground operations, and others). The participation of the local
space industry within the value chain is limited to provisioning products
and services that are finally integrated by ISRO institutions in producing a
turnkey solution. A variety of issues may have influenced such alignment
within the space ecosystem, such as the following:
• Lack of volumes for dedicated investments by the private industry,
hindering the maturity of the industry to provide turnkey
solutions;
• Limitations via export control measures taken by advanced
spacefaring nations such as the United States;
• Timelines for maturity of indigenous technology; and
• Marketability of Indian space upstream and downstream products
in the international market.
However, the emergence of India as one of the leaders in the emerging
market segment—and with a proven track record of a successful space programme—has opened doors for the domestic space industry to break
into the international market. With competitive products and services,
quality infrastructure, and cost advantages utilising the manpower within
the country, the Indian space industry offers a unique landscape for
economic exploitation. It is therefore necessary for the Indian space
ecosystem to renew its entrepreneurial spirit with encouragement from
national policy-makers, as India cemented its position as a global leader in
space technology with a successful Mars orbiter mission in 2014. There is
a need for the local industry to move up the value chain within the
country's space programme to essentially occupy the Assembly,
Integration and Testing (AIT) role for space and launch systems to
capture a larger chunk of the global market, built on the legacy of the
Indian space activities.
The initiation of such vision shall involve transfer of roles for successful
systems such as the Polar Satellite Launch Vehicle (PSLV), and for
applications based on Indian Remote Sensing (IRS) and Indian National
Satellite System (INSAT) to the local industry. A recent independent
study by Northern Sky Research (NSR) projected that more than 1,800
satellites weighing more than 50 kgs will be ordered and launched over the
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next decade, generating $300 billion across global markets. It is thus
imperative for the policy-makers in government to chalk out plans quickly
for capitalising on this opportunity that has the potential to bring in useful
foreign exchange and investment into the Indian space sector.
This paper addresses the motivations and gaps for doing business in the
Indian space industry, and provides recommendations to streamline
activities with the aim of commercial exploitation of the national space
infrastructure. This can be explored through novel Public Private
Partnership (PPP) models which will provide a foundation for a win-win
situation for both the national space agency and the local industry. Such options are already being mulled by ISRO. It is expected that ISRO would
transfer the responsibilities of routine development of space and launch
systems to the competitive local industry, while taking up the challenging
task of development of next-generation technologies, exploration of
outer space, and development of a human spaceflight programme. While
doing so, there are a number of hurdles that need to be addressed for
smooth business operations in the space arena, some of which are
summarised in the following sections.
India's Stance in the Global Market and Emergence of NewSpace
The key reasons for a nation to invest in space include: to utilise its
strategic importance; enhance its scientific capability; create high-skilled
jobs; and facilitate economic contribution to the nation's GDP. The
continued investments in the space sector have seen the size of the global
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space industry almost treble in the last decade (See Figure 1). As
expected, downstream segments of satellite services and ground
equipment generate ~90 percent of the total space industry revenues. By
value, the size of these segments has however remained the same, as
business in upstream services like satellite manufacturing and launch
services— which has a higher government control due to the dual nature
of the technology involved.
Shaping India's Leap into the Final Frontier
Figure 1: Global space industry size evolution between 2004 and 2014
(Source: SIA)

The maturity and size of the space industry is heavily dependent on
government investment and policies. The largest share of the global
commercial space industry belongs to the United States due to higher
investments by government and a well-defined space policy that
promotes industrial participation. Futron's Space Competitiveness
Report (2014) found that not only has the US been successful in leading
with globally reputed space companies like Boeing, Lockheed Martin and
SpaceX, but it is also leading in creating human capital. Much of this
success can be attributed to its large investments in defence space,
providing these companies to scale up their operations without largely
affecting the cash flow.
As India ramps up its space defence capabilities, the lack of a mature
space industrial base will potentially hurt its ambitions. India counts itself
among the top nations in the world in terms of government space
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investment, but is far behind when it comes to creating successful private
industry that is globally reputed. India's space budget has increased in size
(Figure 2) and is one of the largest in the world; however, the lack of an
active space industry at turnkey level might have an immense opportunity
cost for India in manufacturing satellites and launch vehicles to service
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the global market. This in effect is also due to the absence of a single
Indian company among the top space companies in the world (which in
itself is an alarming statistic) that needs to be addressed urgently through
policy push under the several grand schemes announced by the current
government, such as 'Make in India' and 'Digital India'. 
Most of the apprehensions for private investment in space industry come
from the requirements of high capital investment, and the long gestation
periods of space projects to get substantial Return on Investment (RoI)
for the investors. These trends have been put aside by a new breed of
space companies calling themselves 'NewSpace', which thrive on new
business models of low-cost access to space by capitalising on the
advancements made in recent years in small satellite technology,
consumer electronics, and computing power. Tiny modular satellites
called 'CubeSats', weighing 1-4kgs and costing under $100,000 have
revolutionised the way space products and services are delivered to end
users. The movement began in Europe and US simultaneously as a byproduct of university and space agency collaborated research, but it was
the US which took the lead in successfully commercialising these
technologies developed in laboratories. Figure 3 shows the forecast of
nanosatellites weighing between 1-50 kg, which are scheduled to be
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launched globally between 2014 and 2024.
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Motivations to Develop a Private Industry Ecosystem in India
Presently, India has inherent advantages over other countries due to the
availability of skilled workforce, a stable and business-friendly
government, positive investor climate, and low cost of operations.
Because India was an early mover in space technology, it is poised to
become a major space power albeit with a slight policy push towards
greater commercialisation of the industry. Table 1 shows the PESTLE
analysis of India, in lieu of the motivation to develop a strong private
space industry

Table 1: PESTLE Analysis of India

• Defence and Security
• Space
• India
• ISRO
• SATCOM
• space

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