New guidelines could hamper India’s promising space industry

On May 3, space regulator Indian National Space Promotion and Authorisation Centre (IN-SPACe) released new guidelines and procedures for space activity. These guidelines may have a detrimental effect on India’s emerging private space sector.

Space is a critical high-technology domain that contributes to everything from traffic management and crop monitoring to border security and missile defence. Following sweeping reforms in 2020, India’s private space sector has steadily grown. The number of space startups operating in India has risen from one in 2012 to nearly 200 in 2024. However, sustaining this growth will require the right policy environment to attract investments, and encourage entrepreneurs.

Gaps in guidelines

IN-SPACe’s guidelines are a roadmap for implementing India’s space policy. While the space policy was ambitious by opening the sector to private players, the guidelines introduce fresh complexities and uncertainties. 

The guidelines describe the process of this authorisation for the different areas of space-based technologies such as satellite communication, rocket launch services, and earth observation. Yet key areas such as scientific missions, and positioning, navigation, and timing services, which enable GPS and air traffic control, are missing from the guidelines. For unappraised areas, companies are tasked with learning and adhering to the global best practices. These should be handled by IN-SPACe, not the private entities. This shifting of responsibility to the private sector suggests a lack of capacity on IN-SPACe’s part.

Space-based services range from telecommunication services to military applications to cybersecurity, and fall under different ministries and departments under the Government of India. Though IN-SPACe is a ‘single window agency’ for authorising space activities, private players must seek separate clearances from relevant ministries even after getting a provisional authorisation from IN-SPACe.

Further contradictions

The guidelines make it hard for companies catering ‘to the masses’ to stop their services. In some cases, they must provide a notice period of six months before stopping operations. They may also face penalties for the stoppage. Companies such as Eutelsat OneWeb plan to provide 24x7 satellite Internet connectivity to the rural and unconnected parts of India. These regulations may deter companies from providing useful services to millions of Indians. There needs to be more clarity regarding the exact cases which require long notice periods, and possible penalties.

Private players denied authorisation by IN-SPACe can reapply for their application to be reconsidered. However, IN-SPACe does this review, effectively making it the judge in its case. Also, various exemptions are granted to the Indian Space Research Organisation (ISRO), the National Remote Sensing Centre (NRSC), and other government agencies in the guidelines. This goes against the government's announcement that the government and private space agencies will be co-travellers in India’s space journey. It also raises questions about IN-SPACe's autonomy as a regulator. At its core, these disparities can be avoided if these guidelines go through Parliament and become an Act.

Need for Legislation

Many issues arise out of IN-SPACe being under the executive arm of the government. IN-SPACe is an ‘autonomous’ body under the Department of Space (DoS). ISRO is headed by the ISRO director, who also heads the DoS. As a regulator, IN-SPACe must regulate ISRO's activities and those of the private sector. This is akin to a subordinate monitoring the supervisor.

IN-SPACe, while functioning as a promoter, may find itself in the position of needing to carefully review and potentially restrict the activities of certain companies it initially aimed to enable. Also, these private industries may compete with ISRO and the government in their space-based offerings. These contradictions in its duties cast doubt on IN-SPACe's ability to remain effective in both its promotion and regulatory duties.

In order to fix these inconsistencies and create a fair regulatory environment for the private sector, IN-SPACe must be given legal authority, and the guidelines must be codified into a law. The government should separate IN-SPACe's regulatory functions from its promotional ones. Its regulatory half also needs to be independent of the DoS to ensure independence and impartiality in its functions. An IN-SPACe Act must be put in place along the lines of the Securities and Exchange Board of India Act, 1992, and the Telecom Regulatory Authority of India Act, 1997. The Act should also create an adjudicatory and appellate tribunal to handle appeals and disputes between the private sector and IN-SPACe.

Ultimately, India needs a space regulation Act that addresses the gaps in the guidelines. Its formulation should be a consultative process with inputs from all stakeholders. Together, these legislation can democratise the space governance ecosystem, and provide the necessary legal clarity that the private sector expects before undertaking risky ventures. The path to a burgeoning private space sector in India starts with the right regulatory environment.

(Ashwin Prasad is Research Analyst, Takshashila Institution.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.