A stellar power in the making? The role of India in the global space economy
This year has been a milestone for India’s ambitions to increase its competitiveness in the growing global space industry. A series of successful launches and enhanced spatial technologies have been considered as signs of a new era, in which India will be amongst the most powerful players in the space industry. However, upon further inspection, India’s achievements may appear rather modest when considering other global actors.
On February 15, the Indian Space Research Organization (ISRO) successfully launched 104 nano-satellites and a 714-kg satellite for earth observation from one rocket. In June, it launched a 3000 kg communication satellite, the heaviest that India has ever put into orbit. Both Indian and the international media lauded such measures as “exceptional achievements”, especially considering that the launch beat the Russian record of launching 37 satellites from a single rocket in 2014.
Other recent successes include the launch of the first vehicle as part of the regional satellite navigation program in 2013, and the initiation of the Mars Orbiter Mission (MOM) in 2014, placing India as the fourth actor to achieve this behind the United States, Russia and the European Space Agency.
The ISRO, under the authority of India’s Prime Minister, has been active since the early 1960s but has received significant budget increases since 2010 (see Fig.1). This has resulted in a remarkable development of space technologies, commercial launches and missions within India. Moreover, its lucrative partnerships with the private sector have facilitated the increasing role of the country’s technological capabilities. For instance, Antrix, ISRO’s commercial branch, is responsible for the sale of remote sensing data imagery, satellite launches and leases on Indian telecommunications satellites, amongst other services.
These accomplishments are the latest attempts by India to enter the space market and to benefit from the industry’s potential, which is expected to grow exponentially. The rising demand in space-related private services and interplanetary missions culminated in a market that is estimated to be worth more than $300 billion, including the launch service market, satellite and ground equipment manufacturing, and navigation services.
Considering the recent progress, it can be argued that today, India is gradually becoming an important player in the booming industry that is the space economy. While this can be attributed to a variety of factors, this analysis will focus on two.
India’s unique strengths – low costs and ambition
India’s greatest asset has been its ability to show that lower-cost launch vehicles are both available and commercially attractive alternatives. For instance, MOM’s mission was accomplished within a modest budget of $73 million, compared to the $671 million spent by NASA. Moreover, the demand for small and inexpensive satellites is thought to dramatically increase, putting India in an extremely advantageous position compared to its foreign counterparts, who focus mainly on larger satellites.
Last June, the ISRO launched six prototypes of small interstellar spacecraft, weighing only 4 grams each, successfully establishing contact with ground stations. The domestic production of rockets, satellites and other technology has been identified as one of the key elements in India’s ability to offer such low-cost alternatives, while the abundance of cheaper and high-skilled labor has also played in its favor. As a result, India has the potential to become an attractive outsourcing option for many countries. A shift towards smaller, cheaper equipment may very well be emulated by other players in the global space industry, establishing a template for future missions.
Secondly, India’s determination and ambition to increase its presence in the global space economy has resulted in the rapid escalation of its space-related activities. Besides increasing governmental funds to the ISRO every year, India plans to increase its annual launches to 24 by 2020 and boost its existing satellites’ capacity to reach this goal. Future plans include interplanetary missions to Mars and Venus, two lunar missions and solar observations.
Furthermore, alongside its commercial goals, India’s increasing capabilities in the global space market will likely reflect on the country’s diplomatic and security ambitions. For example, the ISRO’s main objectives until 2025 include developing enhanced imaging capabilities for natural resource management and strengthening climate change studies.
Figure 1 – Evolution of India’s space budget
Is India’s power in the space economy being overestimated?
Despite the significance of India’s ambitions and recent achievements, the country needs to address considerable challenges before becoming a significant player in the space industry, as critics point out that it has not quite tapped into the sector’s full potential.
Firstly, in 2015-2016, Antrix earned $3.5 million through its commercial launch services, a rather modest sum, considering that it is only 0.6 percent of the industry’s $5.9 billion worth on a global scale. This relatively poor performance compared to other powers can be attributed to India’s low number of launches. In 2015, for instance, India only launched five vehicles, against 19 launched by the US, Russia and Europe combined. While its low-cost strategy can undoubtedly be successful in the long run, right now companies value availability and frequency of launches more than they value price.
Similarly, although smaller satellites are becoming more viable, the vast majority of the global market still lies in vehicles carrying bigger, heavier satellites. India, while being a very promising actor in launching nano and micro satellites, lacks the same advantage over rockets with a capacity of 3000 to 5000 kg, with the ISRO having produced only three of such vehicles since 2014.
Thirdly, only a small percentage of the satellites launched in February were owned by India, while the remaining equipment belonged to foreign powers such as the USA and European countries. As stated by Jagdish Khetrapal, a scientist working with a large private energy firm, India’s government needs to implement long-term plans to support domestic enterprises to expand their range of products and services for both the domestic and global markets.
Obstacles aside, it is reasonable to conclude that India’s importance in the global space economy is growing at a remarkable rate. While it only possesses a minimal share of the industry today, this is expected to change in the near future. To address the rising demand for launch vehicles, the ISRO is planning to cooperate with an increasing amount of private enterprises. Furthermore, the replacement of heavier satellite launches with smaller and cheaper vehicles would place India in a hugely advantageous position.
