India must boost start-ups to catch up with China’s private space firms

Opportunities for space entrepreneurs were similarly limited in India and China until 2014 — they had to play a secondary role to government-led space programmes. But once Beijing announced that it would formally allow private companies to build and launch satellites independently, the landscape changed dramatically in the next four years.

As of 2018, Chinese space entrepreneurs have reportedly launched 80 start-ups that are building up to get their share of the global space industry.

In 2018 alone, these start-ups raised $555 million (Rs 3,731 crore) — more than a sixth of the total global investment of $2.97 billion (Rs 20,790 crore) in space start-ups.

But how do Indian start-ups fare in comparison?

There are currently about a dozen space start-ups in India right now, such as Team Indus, Bellatrix Aerospace, SatSure, Skyroot Aerospace, Agnikul Cosmos, Astrome, Pixxel, Kawa Space, Exseed Space and Blue Sky Analytics.

However, the combined investments they have received would perhaps not even cross those raised by a single Chinese start-up.

State of China’s space industry ::

The Chinese space sector has several state-owned companies, such as China Aerospace Science and Industry Corp (CASIC), China Aerospace Science and Technology Corp (CASC) and layers of state-owned subsidiaries such as the China Academy of Launch Vehicle Technology (CALVT), which are all trying to enter the global space market with a new range of satellites, launch vehicles or other services.

This essentially means Chinese start-ups compete with the state itself to survive and thrive.

However, both the Chinese government and investors backing the start-ups seem to believe that this complex terrain for entrepreneurs is not a zero-sum game, and their thesis seems to be that the Chinese start-ups have a shot at grabbing a slice of the global space pie.

How does the Chinese govt benefit ?

The Chinese government has the money, capability and technology to keep driving the space programme using its own agencies. But there were three major motives behind the 2014 decision to open up the space sector.

First, the Belt and Road Initiative (BRI) has found its way to outer space as well. China intends to use its satellite remote-sensing system, communications, broadcasting as well as satellite navigation system to build an integrated space-ground information network. Any capacity created by its private entrepreneurs can add to this BRI roadmap and accelerate the pace at which space can be integrated into it.

Second, several space start-ups may go on to create capacity locally for the Chinese market, where the government has not really planned any initiatives. This capacity can be a catalyst for space to become integrated with commerce, and could provide both operational and competitive advantages over time. Typical examples of these are services such as in-flight Wi-Fi connectivity, connectivity of remote industrial assets for autonomous operations, and the use of image/video analytics for business intelligence in industries such as agriculture and energy.

Third, the capacity created by space start-ups in China will also benefit the security and military apparatus by diversifying the ability to tap into innovations outside the government-led state enterprises. This kind of augmentation to use capacity created by commercial space actors is prominent even in countries like the United States, who have now made plans to integrate commercial space into military/security demands.

Problems plaguing Indian space sector ::

In the Indian space sector, low volumes, a possible single customer, low-risk appetite and lack of access to large-scale financing have been permanent fixtures for the last five decades.

To help promote the industry, the Indian Space Research Organisation (ISRO) came up with technology transfer and buy-back schemes.

However, new-age space start-ups are different to the ones in the past, in that they do not intend to primarily rely on ISRO for their orders and are developing their own proprietary products/services. Thus, one can say that after half a century, a certain risk appetite and confidence in the ability to develop products/services independently has developed.

Can India catch up?

There are no explicit start-up support programs in the space sector in India today. There are also some adverse regulations such as 18 per cent GST on Indian companies, while foreign companies enjoy zero tax if they launch on India’s rockets.

Make in India, the government’s flagship programme to promote the growth of Indian industry recognises space as a key sector. But beyond raising the FDI limit to 100 per cent, there have been no other strategies used to promote growth.

There are definite opportunities for India to catch up with the growth being witnessed in China. There are doubts over the Chinese private sector’s ability to win orders outside China due to security concerns. However, a large domestic market to kick off their run, expanding into countries aligned with Beijing, is not far-fetched.

This is where Indian start-ups, as they mature, can exploit the global temperament to expand space commerce.

The window for the Indian government to act is closing fast. It needs to start believing in the motivation of these start-ups to build credibility by offering competitive products/services. It should recognise that space is not just science or exploration, but can also be a sector for commerce and trade.

The success of India’s space start-ups and the larger industry will not only mean more jobs and tax revenue for the government, but would also help Indian industry stay in the race with its neighbour and rival, China.

 

 

 

 

Source:- The Print