ON NOVEMBER 18, 2022, Vikram-S, a sub-orbital rocket of Skyroot Aerospace, made its maiden flight from Satish Dhawan Space Centre of Indian Space Research Organisation (ISRO) in Sriharikota, Andhra Pradesh. It was India's first privately-built rocket launched from a government facility. For the Hyderabad-based start-up, the rocket, built using advanced components such as carbon composite structures and 3D-printed parts, validated over 80% technologies that will be used in its Vikram-1 orbital vehicle, planned for launch in 2023. Sub-orbital vehicles travel high enough to reach the edge of outer space but do not have the energy to achieve orbit.
Less than two weeks earlier, on November 8, another space-tech start-up, Chennai-based Agnikul Cosmos, successfully test-fired its single-piece 3D-printed engine, Agnilet, at Vertical Test Facility, Thumba Equatorial Rocket Launching Station at ISRO's Vikram Sarabhai Space Centre, Thiruvananth- apuram. Agnilet, world's first single-piece 3D-printed rocket engine, was fully designed and manufactured in India. The test validated the company's in-house technology and is being considered a big step towards mastering technology to design, develop and fire rocket engines. The prowess of Indian space-tech start-ups is not limited to validation of technologies. Three of the eight nano-satellites ISRO's Polar Satellite Launch Vehicle (PSLV) carried during its 56th flight to space from Satish Dhawan Space Centre on November 26 were built by Indian start-ups. These included a hyperspectral imaging satellite made by Bengaluru-based Pixxel and two amateur radio communication nano-satellites manufactured by Hyderabad-based Dhruva Space. Hyperspectral imaging is a technique that analyses a wide spectrum of light instead of just assigning primary colours (red, green, blue) to each pixel. Pixxel had caught attention in April 2022 when it became the first Indian company to launch a commercial satellite into space through U.S. billionaire Elon Musk's Space Exploration Technologies Corp. (SpaceX).
Unprecedented entrepreneurial spirit is driving India's space businesses to conquer new horizons after government opened up the sector, for decades an exclusive domain of ISRO, to private, especially home-grown, companies. Pivotal to this change have been a dozen policy initiatives over last five years, including a shift in ISRO's role from government's space agency to mentor of private space industry.
Policy Boost
"The world is changing. National space agencies are no longer the sole space service providers. ISRO has been demonstrating its capabilities for years. We are now looking at how demonstrated capabilities can be monetised or handled in a more businesslike manner to create economies of scale for the space sector to grow. This is what government of India as well as our prime minister looked at when they announced space sector reforms," says S. Somanath, chairman, ISRO and Space Commission, and secretary, Department of Space.
The reforms were not announced out of the blue. Long before giving private sector the green signal to participate in building satellites and launching rockets, government had undertaken a series of policy steps to create demand for satellite technologies. The result — a thriving user ecosystem of satellite services such as communications, navigation, agri-services and geo-mapping that made a business case for more satellites.
The current phase of reforms started in 2018 with government announcing a National Digital Communications Policy for strengthening satellite communication technologies. Its objectives were review of regulatory regime and development of an ecosystem for satellite communications. Flight and Maritime Connectivity Rules, 2018, came next. Drafts of space-based communications policy, remote sensing policy, humans in space policy, space transportation policy and satellite navigation policy are in various stages of finalisation.
But the most important shift was incorporating a public sector company, New Space India Ltd. (NSIL), as commercial arm of ISRO for ensuring private sector participation. NSIL will ensure that each satellite is built on order and launched on a payment basis without government funding. NSIL's first contract was launch of a GSAT-24 satellite using Ariane-5 (a launch vehicle operated by French commercial space transportation company Arianespace for European Space Agency) for its customer TATASKY (TATAPLAY now) a year ago. This is just a start.
Potential Market
There is a world of opportunity out there. Satcom Industry Association (SIA-India) says bulk of opportunities lie in downstream product and service offerings. Even existing satellite-enabled economy is big. "We have close to 70 million DTH users, over 1.25 lakh ATMs. Indian banking system is entirely dependent on satellites, so is the financial market. All private gas stations, about 50,000, are automated with satellite-enabled technologies. Over 6,500 locomotives are connected with satellites and over 40,000 villages empowered through e-governance, possible due to satellite-enabled connectivity. Geospatial companies alone are doing ₹1,500 crore business in India today," says Anil Prakash, director general, SIA-India. He sees opportunities in the fact that 50% of India's rural areas are not digitally connected even today. "The size of India's satellite broadband business itself will be close to $5 billion by 2025."
As India's space ecosystem evolves, its companies will have an opportunity to bag a share of the $447 billion global space and space-tech economy by offering products and services for making and launching satellites. They will also be able to sell the entire spectrum of satellite-enabled services ranging from remote sensing applications for agriculture and disaster mitigation to space-based navigation, geospatial technology, communications and defence. According to industry estimates, with the right reforms, the Indian space economy can grow from its current level of $8.94 billion (2% share of global space economy) to $50 billion (10% share) by 2025. Indian space sector players say they are targeting a 50% share (or $0.75 trillion) of the $1.5 trillion space economy by 2047. Their bullishness stems from multiple factors. Globally, the space-tech industry is booming due to technological advances and entry of private companies such as SpaceX, Virgin Galactic and Blue Origin. Depending on whom you talk to, industry watchers peg the number of satellites waiting to be launched in next couple of years at one-two lakh. Only 4,800 are operational at present.
India has capabilities to grab a share of this opportunity. ISRO has already built a strong vendor network through its three-decade-long partnerships with private players for satellite and launch vehicle manufacturing. India has over 100 space start-ups. And, as the much-awaited National Space Policy sees the light of day, foreign fund inflows may increase. Indian entrepreneurs are keenly watching the space.
Satellite Business
"I have been awaiting this for decades," says Subba Rao Pavuluri, a septuagenarian entrepreneur who founded one of India's early aerospace manufacturing firms, Ananth Technologies. "We have been making sub-systems for ISRO satellites for years. But now, we are building complete satellites. We anticipate that every PSLV and SSLV (small satellite launch vehicle) will carry at least one satellite made by us. Our Bengaluru facility can make eight big (2,500 kg) satellites in 18 months. It can also build 20 small (150-200 kg) satellites every month," he says.
One of the reasons for this rush to build satellites is the boom in nano-satellites. Manufacturers from across the world have sought US Federal Communications Commission's approval for launch of about 2.75 lakh satellites. "Demand for launch vehicles and satellites will be huge. Imagine the opportunity if we can attract just 10% of that business," says Pavuluri. "We have been growing 25% annually for last four-five years. With reforms, we expect revenues to double next year. We already have an order to build 12 satellites for a U.S. company," he says.
It is not just established players that are sensing an opportunity in space sector reforms. Start-ups are equally enthusiastic about using government-backed ecosystem for a bigger role in satellite manufacturing. Take two amateur radio communication nano-satellites built by Hyderabad-based Dhruva Space. Launched as part of ISRO's PSLV C54 mission on November 26, the indigenously-developed satellites, Thybolt-1 and Thybolt-2, belong to the low earth orbit (LEO) category of small satellites that are in huge demand globally. "Building indigenous capability in small satellite technology is an integral part of our philosophy," says Sanjay Nekkanti, CEO, Dhruva Space Private Ltd.
The same rocket also launched a hyperspectral microsatellite of Pixxel. The start-ups's satellite, which weighs less than 15 kg and has 150+ wavelengths, can capture images that can be studied to detect pest infestation, map forest fires and identify soil stress and oil slicks. Pixxel says it has entered into partnerships with Rio Tinto (for identifying mineral resources) and Data Farming (for determining crop issues). The company plans to build a health monitor for the planet through a constellation of hyperspectral small satellites.
NSIL, while helping companies and start-ups scale up their manufacturing base, is also catering to global commercial satellite launch services market on its own. On October 23, it launched 36 satellites of a U.K.-based private company OneWeb (in which Bharti Airtel's Sunil Bharti Mittal holds substantial stake) to low earth orbit using ISRO's most powerful rocket, LVM3. It has got an order for 36 more satellites from OneWeb.
Next on agenda is getting Indian industry to make launch vehicles for ISRO. It signed a contract with a consortium of Hindustan Aeronautics Ltd. and L&T in September 2022 for building five PSLV-XL. The first fully industry produced PSLV-XL will be rolled out within 24 months. This will be historic for NSIL, ISRO and Indian space industry. In first year (FY20) of operations, NSIL's turnover was ₹345 crore. It went up to ₹500 crore in FY21 and ₹800 crore in FY22. "This year, we are expecting ₹3,000 crore," says Radhakrishnan Durairaj, CMD, NSIL.
Start-ups Up the Game
Start-ups also have a significant presence in manufacturing and operating smaller launch vehicles. IIT-Madras-incubated Agnikul was the first Indian company to sign an agreement with ISRO for accessing its expertise and facilities to test-fire Agnilet. The company has also set up Rocket Factory- 1, India’s first rocket facility dedicated to 3D-printing such engines at scale. The factory is located in IIT-Madras Research Park.
Skyroot Aerospace's Vikram-S was also a milestone in India's space journey. "The learnings from this mission will underpin our next Vikram series mission, which will happen in 2023, and take us ahead as we move towards our vision of opening space for all," says Pawan Kumar Chandana, co-founder, Skyroot Aerospace.
India's space reforms have caught the attention of global players too. One of them is Luxembourg-based SES, a global satellite-based content connectivity solutions provider which operates five satellites catering to the Indian region. "What ISRO has done with OneWeb is fantastic. Five years ago, I would not have thought it was possible. They were able to enter into contract, provision the vehicle, get the satellites and launch within a remarkable time frame," says Deepak Mathur, EVP, Global Sales, SES Video. "With SpaceX, we were the first commercial customers. As India gears up, we will be in line for both (satellite) procurement and (rocket) launch," he says. SES recently announced a joint venture with Jio Platforms to leverage SES-12, its high-throughput GEO satellite serving India, and O3b mPOWER, SES' next-generation MEO (medium earth orbit) satellite. Mathur says India can tap opportunities not only in hardware but also services like analysis of data captured by satellites. "India has enormous potential in applications, ability to analyse visual data and converge it into intelligent analysis," he says.
The Challenges
Still, India needs to take several steps to enable the ecosystem to function seamlessly. The Indian Space Association and consultancy firm EY listed the changes needed in India's regulatory framework in a recent report titled: 'Developing The Space Ecosystem In India: Focusing On Inclusive Growth.' Stating that approvals from multiple agencies such as Department of Space, Department of Telecommunications and Ministry of Information and Broadcasting are needed for upstream and downstream activities, the report has sought a single window approval through a nodal body focused on space economy. It calls for liberalised spectrum and licensing/authorisation policies. It says licence holders are required to set up own earth stations and suggests that given the increasing complexity of technologies being used, satellite operators should also be permitted to set up own earth stations. It has also suggested a law for clarity in norms and predictability in policies. Government should also minimise administrative hurdles to private investment, it says. The first step, says the report, has to be finalisation of the much-anticipated National Space Policy, the draft of which has been circulating among stakeholders for past two years.
Sreeram Ananthasayanam, partner, Deloitte India, says there is every possibility that the policy could do to the space sector what economic reforms of early 90s did to the banking sector — usher in an era of public-private co-existence and massive value creation. "The space policy should also provide incentives for building a thriving ecosystem of research and innovation," says Ananthasayanam. But the bigger challenge will be to strike the right balance between ease of doing business and regulatory control as space technology has dual uses.
SES' Mathur says government should not look at the sector only as a hardware play. "There is launch, there is hardware that goes into space and then there are service layers. It is important to encourage all of them. In order to encourage innovation, you should have the best global technology coming to India, India learning from it, creating services on top of it, learning how to build that better, and exporting it. I hope that's the way the policy is implemented, because if we do it right, sky is the limit," says Mathur. "And there is no limit to the sky," he adds.