India’s liberalised 100-percent FDI policy in the space sector will struggle without a national space law.
In 2023, the Indian Space Research Organisation (ISRO), the national space agency of India, conducted a record seven missions and also achieved the credit of being the fourth nation to successfully land a spacecraft on the moon. After the success of Chandrayaan 3 and Aditya L1 missions, ISRO plans to conduct 12 ambitious space missions this year. 2024 is the “year for Gaganyaan” as India prepares for its first human space flight mission, which will carry a crew of three astronauts to an orbit 400 km above the earth’s surface. While the success of ISRO missions is strengthening India’s emergence as a space power, India is also institutionalising the involvement of private players in the space sector.
Space sector reforms that enhance private participation in India started in 2020 with the deregulation of stringent government controls over space activities. In 2023, the Government of India released the Indian Space Policy to institutionalise the involvement of private actors and permit non-governmental entities to augment space capabilities. As per the 2023 Policy, the Indian National Space Promotion and Authorisation Centre (IN-SPACe) will operate as an autonomous entity which will promote direct, oversee, and authorise space-related activities within the nation. Space technologies and platforms developed with public funding will be commercialised by NewSpace India Limited (NSIL), the Department of Space’s public sector undertaking. These institutional mechanisms seem crucial considering the significance of the commercial space sector in building the Indian economy.
Space sector reforms that enhance private participation in India started in 2020 with the deregulation of stringent government controls over space activities.
From telecommunication, telemedicine, resource mining, and manufacturing to climate change mitigation, space technology is changing the way humans live. Today, satellite data is used to strengthen food security, satellites monitor Earth to assess the effects of global warming, and states are building military operational domains in space to strengthen their national security. As many of these space applications cannot solely bank on public sector investments, the future of commercial space activities is heavily reliant on investments from the private sector. These investments will also come from overseas companies and to institutionalise this, India needed to liberalise entry routes and enhance ease of doing business.
The Centre recently amended the Foreign Direct Investment (FDI) Policy to allow 100 percent foreign direct investment in the space sector. The amendments were made under Para 5.2.12 of the Consolidated FDI Policy Circular of 2020. It is expected that this will trickle down to creating jobs, adopting modern technologies and strengthening the global value chains. According to the Government of India, “with increased investment, they would be able to achieve sophistication of products, global scale of operations and enhanced share of global space economy.”
According to Space Foundation’s 2023 Q2 Space Report, the value of the global space economy is US$ 546 billion. It is expected that space will be an US$ 800 billion economy in the coming five years. India is a valuable player in the global space economy with the share of its domestic market being INR 6,400 crore (US$ 8.1 billion), which is around 2 percent of the global space economy. As per IN-SPACe’s projection, India’s space economy can reach INR 35,200 crores (US$44 billion) by 2033 with about 8 percent–10 percent of the global share. With over 90 nations, more than 10,000 firms and around 5,000 investors in the space industry, the competitive space ecosystem will be a trillion-dollar industry by 2050.
There are over 200 space start-ups in India. Flourishing commercial players like Dhruva Space, Skyroot Aerospace, Agnikul and Digantara are working to develop space technologies ranging from private launches, developing reusable launch vehicles, and space debris analysis to manufacturing space-related components. While we celebrate the success of our space missions and the futuristic FDI policy, it is equally important to look at the regulatory framework relating to space activities in India. Despite being a powerful space-faring nation, India does not have a national space law. Though significant efforts have been made through the Draft Space Activities Bill of 2017 and its revision in 2022, much-needed legislation is still to see the light of day.
There are over 200 space start-ups in India. Flourishing commercial players like Dhruva Space, Skyroot Aerospace, Agnikul and Digantara are working to develop space technologies ranging from private launches, developing reusable launch vehicles, and space debris analysis to manufacturing space-related components.
The new 2023 Policy is not based on a legislative framework, which is essential for preventing executive excesses. It is also silent on many issues including the role of Antrix Corporation Limited (Antrix), the commercial arm of ISRO, intellectual property aspects, international law obligations and many more. The concerns emanating out of all these can only be solved through a national space law. Today, the multi-billion-dollar sector functions without a clear parliament-mandated legal framework in India. The core functions of the legislature like authorising private players’ entry into the space sector are at the risk of being managed entirely through executive action. This reflects bullish behaviour, which is prone to challenge before the judiciary at any time in future. With increasing private investments to build space launch facilities or to develop commercial space stations, mega-constellations, space resource mining, etc., uncertainties will increase as questions about accountability, transparency, and state responsibility arise. This will end up in the rise of multi-million-dollar disputes like the disastrous Antrix-Devas case.
The new 2023 Policy is not based on a legislative framework, which is essential for preventing executive excesses. It is also silent on many issues including the role of Antrix Corporation Limited (Antrix), the commercial arm of ISRO, intellectual property aspects, international law obligations and many more.
The 20th-century space race era was defined by geopolitics, but today space exploration is defined by economics. While the new commercial aspect of the Indian space sector may generate interest even amongst global players like SpaceX, Virgin Galactic, and Blue Origin, it would be critical to see how the new liberalised policy will work without a national space law. As a responsible space-faring nation, we should never forget our commitment to adhere to the rule-based approach in promoting private space investments.
Sandeepa Bhat B. is a Professor of Law and Director of the Centre for Aviation and Space Laws at the West Bengal National University of Juridical Sciences, Kolkata
Adithya Variath is an Assistant Professor and Coordinator of the Centre for Research in Air and Space Law at Maharashtra National Law University, Mumbai.
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Sandeepa Bhat B. is a Professor of Law and Director of the Centre for Aviation and Space Laws at the West Bengal National University of ...
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Adithya Variath is an Assistant Professor and Coordinator of the Centre for Research in Air and Space Law at Maharashtra National Law University, Mumbai. ...
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