Can Private Firms Turns A Profit in Space?

Can Private Firms Turns A Profit in Space?

Introduction :- 

On May 16, 2020, Indian Finance Minister Nirmala Sitharaman electrified the Space community with the bold announcement on boosting private participation in Space activities. Here is what the minister said:

•Indian private firm will be a co-traveller in the country’s Space sector journey.
•India will provide level playing field for private companies in satellites, launches and Space-based services.
•India will provide predictable policy and regulatory environment to private players.
•Private sector will be allowed to use ISRO facilities and other relevant assets to improve their capacities.
•Future projects for planetary exploration, outer Space travel, etc. will be open for private firms.
•There will be a general geospatial data policy for providing Remote Sensing data to tech-entrepreneurs.

Even though these bold statements have excited the Space communities in the technology and application areas, it needs to be said that a policy statement such as this, which gives a “feel good” warmth, needs to be followed up with cold and hard actions. A statement is not a policy. A policy needs to be backed up with processes which will give rise to programs and projects.

When the US was losing the Space race to the erstwhile USSR, President John F. Kennedy declared in September 1962 that “we choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard and strong; because that goal will serve to organize and measure the best of our energies and skills, because this challenge is one that we are willing to accept, one we are disinclined to postpone, and one we intend to win, and the others, too.” This was followed by the Apollo Program, and with Apollo 11, the first human, an American, stepped on the Moon in July 1969.

In these seven years, several US industries blossomed and grew into global Space giants which supported the US to further its Space ventures, till the tragic failures of the Space Shuttle, which effectively closed down human spaceflight from American soil on American vehicles. In the first decade of the new millennium, SpaceX, Virgin Galactic and many other private Space start-ups jumped in with new ideas and new programs.

On May 30, 2020 after nine years, NASA astronauts have once again ridden into Space from US soil on a US built vehicle. The only difference being that the Falcon 9 launcher and the Crew Dragon spacecraft were designed, built and launched by SpaceX from a completely refurbished and, a very aesthetically attractive Pad 39A of the NASA launch complex. It is also important to note that an old hand like Boeing lost out to a bold start-up like SpaceX.

Commercialization of capabilities:

It should be noted that ISRO is just a part of the Department of Space, which is the main body akin to NASA. However, because of its size and the nature of its growth, it is easy to confuse ISRO with DOS and use the acronyms interchangeably. DOS has two other units which are not a part of ISRO. These include Antrix Corporation Limited, ACL, and New Space India, NSI. The latter should not be confused with NewSpace India, which represents an informal consortium of private Space entrepreneurs.

ACL is dubbed as the commercial arm of ISRO and is engaged in providing Space products and services to international customers worldwide. It is really the commercial arm of DOS, but it uses all ISRO facilities and manpower to further its business. Started as a one-and-a- half person organization, housed in ISRO headquarters, it relies heavily on the Space organization without any benefit to it in terms of sharing profits or even funding research there. In short, ISRO is forced into operational and commercial tasks through ACL, neglecting its mandated role of R&D, much to its detriment as explained above.

NSI was set up recently with the “primary mandate of enabling Indian industries to scale up high-technology manufacturing and production base for Indian Space Program”. Both ACL and NSI are wholly owned Government of India entities under the administrative control of DOS. It seems that while ACL is to market ISRO products and services abroad, NSI is to encourage industry to scale up to meet ISRO requirements of high technology manufacturing.

It is clear from the above information that the vision of DOS viz-a-viz private industry is one of managing contractors for ISRO requirements and not one of encouraging independent co-travellers. In order to realize the independent participation of private industry in Space activities, the government needs to look beyond ISRO-DOS.

Structural reforms and strengthening of research and exploration:-

To be able to bring the policy statement to reality requires a major overhaul of government led Space activities. Only then will the promises be realizable.

The first need is of a Space policy, which is hanging fire for long. Such a policy is needed to encourage a vibrant space industry independent of ISRO-DOS. Such a policy must emerge from the Space industry and user communities, and not be driven by ISRO-DOS. One such draft by an organization, Takshashila Institution, needs to be considered seriously.

Secondly, ISRO needs to be restructured by removing all operational activities including their related facilities and services. All services should be with ACL. The huge facilities in ISRO funded by the government should be made into national Space technology fabrication and testing assets which are open to both ISRO-DOS and Industry impartially. NSIL should be repurposed to manage these assets on behalf of the Government of India.

ISRO should concentrate on advanced launchers, payloads and ground systems for Earth related applications, Space Sciences and Human in Space programs. While interaction with ACL and NSIL will be necessary, it should be on strictly commercial terms as applicable to other co-travellers.

Commercialization of capabilities and scalability of societal impact:

One of the very interesting ideas that has been posted recently is the possibility of independent industries to meet the needs of the defence forces independent of ISRO which is essentially a civilian organization. It is also possible that private communications service providers could fund communications satellites using the MEO, as is happening in the rest of the world, maybe for 5G services for example. The same could apply for Remote Sensing constellations.

The Government should break away and do only those things that industry cannot do. These include developing advanced technologies and systems for healthcare, education, Space sciences and humans in Space. Leave the industry to find its own way and do their own thing guided by an enabling Space policy which should be reviewed and modified from time to time in consultation with all stakeholders.

Issues and concerns for private participation in space industry in India:-

1.Data Risk:Though space it gives an opportunity to entrepreneurs but raw data of ISRO in the hands of the public is sensitive and consists of danger of misuse or improper utilisation of data.
2.Regulation: Though it is a profitable investment, regulation of private sector participation is not easy. The time taken for regulatory clearances and unstable political institutions can cause delays and hurdle in decision making of investors.
3.Revenue loss: ISRO will lose a fair amount of money it is earning through its space activities. This will reduce government revenue.
4.Unfair commercial practices: Allowing private sector may lead to lobbying and unfair means to get space projects or launch of any satellite for their own profit. It may also lead to leakage of sensitive information by private players to other countries and companies to make profit.


India should create an independent body that can create a level playing field for government and private space enterprises. A new Space law for India should be framed which should aim at facilitating growing India’s share of global space economy to 10% within a decade which requires a new type of companionship between ISRO, the established private sector and the New Space entrepreneurs.


i.Scott Wallask, Rocket Unity: Can private firms turn a profit in space?,  20th February, 2019.
ii.Ted O'Callahan, Is there any profit in outer space?, 07th December 2011.
iii.Loren Grush, How the private space industry could take over lower Earth orbit — and make money off it,, 16th February, 2018.