On April 20, 2023, the Indian Space Research Organisation (ISRO) and the Indian National Space Promotion & Authorisation Centre (IN-SPACe) released the Indian Space Policy 2023 (“Policy”) (accessible here), which was recently approved by the Cabinet Committee on Security to enable India to pursue a holistic approach and encourage private sector participation in the entire value chain of the Space Economy.

The space sector in India has been largely dominated by the government, requiring substantial capital and political backing to operate. However, with the rapid advancement of technology, development in India, and increasing demand for telecommunication services, satellite data, and space capabilities, the introduction of for-profit private players has become possible. The government believes that with the inclusion of private participation, India has the potential to capture 9% of the global space economy by 2030, a significant increase from the current share of around 2%. The space economy was valued at around $469 billion in 2022 and is expected to reach around $3 trillion by 2050.

Below, we trace the evolution of India's regulatory framework for private participation in space sector and highlight the key aspects of the new Policy.

In 1958, India joined the UN General Assembly's ad hoc committee on the Peaceful Uses of Outer Space (COPUOS) which formulates international Space Law. This committee negotiated several space accords, including the Outer Space Treaty (accessible here) which India signed in 1967 and fully ratified in 1982. In 1979, India signed the Agreement on the Rescue of Astronauts (accessible here) and recognised the Convention on International Liability for Damage Caused by Space Objects (accessible here). India also signed the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies (accessible here) and acceded to the Convention on Registration of Objects Launched into Outer Space (accessible here) in 1982. The Indian Government’s first attempt to allow private participation in the space sector and regulate space activities was with the introduction of the Draft Space Activity Bill, 2017 (accessible here). However, the bill was withdrawn following criticism from private players.

On June 26, 2020, the Government of India declared a substantial transformation of the Indian space sector by introducing reforms (accessible here). The aim of these reforms was to enhance the involvement of private players in the Indian space programme and enable them to play a significant role in improving India's market share in the global space economy.

The government established two entities to promote private sector participation in the Indian space industry. New Space India Limited (NSIL) was created in 2019 as a commercial arm of ISRO to exploit R&D for a demand-driven space model. It owns satellites, develops launch vehicles, and provides launch services. IN-SPACe was set up in 2020 as a regulator and facilitator for the private space industry. It assesses private sector demands in consultation with ISRO and acts as a facilitator and regulator under Article VI of the Outer Space Treaty.

The private sector’s participation in India is regulated by The Satellite Communication Policy, 2000 (accessible here) and the Remote Sensing Data Policy, 2011 (accessible here).

With the new Policy, the Government’s vision is to augment space capabilities, enable a flourishing commercial presence in space, use space as a driver of technology development and derived benefits, pursue international relations, and create an ecosystem for effective implementation of space applications. The strategy includes encouraging research and development in the space sector, providing public goods and services using space technology for national priorities, creating a stable and predictable regulatory framework through IN-SPACe, promoting space-related education and innovation, and increasing awareness on space activities. Indian consumers of space technology or services can procure the same directly from any source, be it private or public.

This Policy finally outlines and demarcates the functions and responsibilities of the relevant organisations, such as the ISRO, NSIL, IN-SPACe, the Department of Space (DoS), and Non-Governmental Entities (“NGEs”). We have summarised their functions and responsibilities below:

1. Non-Governmental Entities (NGEs)

• Undertaking end-to-end activities
• National and International communication services
• Establishment and operation of ground facilities
• Establishing, operating and disseminating remote sensing satellite systems
• Manufacturing and operating space transportation systems
• Establishment and operation of launch infrastructure
• Development of space situational awareness capabilities
• Research, innovation and technology development
• End-to-end services for safe operations and maintenance in space
• Commercial recovery of an asteroid resource or a space resource
• Make International Telecommunication Union (ITU) filings either through IN-SPACe or through a foreign administrator

2. Indian National Space Promotion & Authorisation Centre

• Provide single window agency
• Define frameworks and ensure level playing field for NGEs
• Enable specialized technical facilities and enable easy access to remote sensing data
• Sharing of best-practices and coordinate ITU filings
• Authorize use of Space Objects and facilitate technology transfer
• Authorize launch manifests
• Issue guidelines for safety and security requirements and to address liability aspects
• Ensure registration and necessary clearances for space objects
• Prescribe conditions for authorization review, revocation, etc.
• Maintain list of space activities requiring authorization

3. Indian Space Research Organization

• Research and development
• Technology sharing, and providing open data access
• Making archived data available
• Develop human spaceflight capabilities
• Develop collaborative framework
• Undertake in-situ resource utilization
• Transition out from manufacturing

4. Department of Space

• Oversee distribution of responsibilities
• Nodal department for implementation
• Interpret and clarify ambiguities
• Ensure earth observation capability and data
• Participate in international efforts
• Ensure sustenance of satellite systems
• Ensure compatibility and interoperability
• Establish framework for safe and sustainable space operations
• Co-ordinate international cooperation
• Create mechanism to resolve disputes

5. NewSpace India Limited

• Commercialise space technologies developed through public expenditure,
• Manufacture, lease, or procure space components, technologies, platforms, and other assets
• Provide commercial space-based services to government entities or NGEs.

This Policy applies to any space activity that takes place to or from Indian territory, or within India's exclusive economic zone. The Government of India reserves the right to provide exemptions to the Policy on a case-by-case basis.

However, the current Policy lacks clarity on the permissible foreign direct investment (FDI) for the various nature of space activities as may be conducted by the NGEs. Currently, 100% FDI through Government route is allowed only for establishing and operating satellites. Additionally, the Policy does not address the spectrum framework, but a consultation paper was released by TRAI on April 6, 2023 for taking comments on spectrum assignment for satellite-based communication (accessible here). It is expected that the annual revenue potential for satellite-based communication is expected to reach Rs. 5000-6000 crores by 2025 (accessible here).

Moreover, the Policy does not specify the entity responsible for its publication, such as the Space Commission, DoS, or ISRO, which raises questions about its statutory weightage. There is also a lack of clarity on the statutory authority of IN-SPACe and its powers to issue regulatory guidelines for the NGEs. Nonetheless, and despite these gaps, there is hope that the Policy is the first step towards building the celestial future for India in the coming years, and that the government is likely to come with more clarity in the anticipated space activities bill and subsequent documents. The introduction of the Policy indeed marks a new beginning for India’s space program.

Authored by: Mr. Nakul Batra, Partner and Ms. Aankhi Anwesha, Associate, DSK Legal