Will India’s private space industry take off?


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Link here. The article describes the presentations given during an event in India that included both government and commercial representatives of its space industry.

It appears that one of the concerns of India’s private space sector is the recent creation of a new division in ISRO, the country’s space agency, focused on making ISRO’s technology available to the private sector, for a fee. From the second link:

Reports citing official documents suggest that in order to facilitate transfer of technology, NSIL [Newspace India Limited] will take license from ISRO before sub-licensing them to the commercial players. The technology transfer envisaged through the NSIL will include India’s small satellite program, the small satellite launch vehicle (SSLV) program and the Polar Satellite Launch Vehicle (PSLV). This would mean that services including launching of satellites can be undertaken by private entities once the license is procured by the NSIL.

Speaking to Times of India, Dr. Sivan, head of the ISRO, said that the NSIL will essentially become the connecting link for ISRO with commercial players to aid in technology transfer for a fee. As he put it: “We wanted a mechanism to transfer the technologies of our new projects like SSLV and even lithium-ion cells. With this company, ISRO will be able to smoothly transfer these technologies after charging fees. Once companies start mass production of small satellites and launchers, ISRO will be charging them for using its launch services.” In another interview, he had stated that he expected a demand for 2-3 SSLV rockets per month.

It appears the speakers at the conference had mixed opinions about NSIL. Some saw it as a direct competitor, holding significant advantages because already has guaranteed government funding. Others were more optimistic.

What strikes me is the decision by ISRO to have NSIL charge private companies for its technology. This is a very bad idea, for a number of reasons. First, it makes NSIL a power-broker over the private sector, able to pick its own favorites in that industry. Second, such schemes in government always lead to corruption and bribery. Third, the fees will act to squelch new companies unable to afford them.

The U.S. approach has always been that any technology developed by its government agencies is public knowledge, paid for by the taxpayer, and thus instantly available for use by any private operation at no charge. While this policy has its own pluses and minuses, in general it works far better at encouraging development and growth in the private sector, while limiting the power of government entities.

The structure of India’s new government entity, combined with the oppressive language proposed in 2017 for India’s space law, does not bode well for the growth of an independent and competitive commercial Indian aerospace industry. In fact, both suggest that India’s government-controlled space program is beginning to travel the typical road that all government programs all eventually travel: First they are innovative and successful. Then they grow in size and power. Finally they use that power to squelch any private competition to protect their turf.

It looks like ISRO is beginning to enter that third stage.

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5 comments

  • “Second, such schemes in government always lead to corruption and bribery. ”

    Perhaps ISRO sees that as a feature.

  • Dick Eagleson

    Unfortunately India’s culture of government has long been the usual 3rd-world one of paying “public servants” very little and allowing them to live mostly off bribes demanded for provision of services/favors. India’s very venerable and well-entrenched “Babu State” is at least as big a drag on Indian society overall as is the U.S.’s own Deep State.

  • Edward

    From the article: “‘There is no dearth of opportunities if startups look in the right places,’ Prasad says. ‘Launching rockets and putting satellites in space is one thing, but it is important to connect it to the opportunities on the ground. There are a number of private arenas where satellite data is vital and extremely useful and that’s where Indian startups should be looking,’ explains the entrepreneur.

    This is an area that Silicon Valley focuses on, where the space business is concerned. Rather than just having hardware in orbit, some companies offer the service of mining information out of the data that comes from other companies’s satellites.

    Half a decade or so ago, I went to a panel presentation that included the founder of Moon Express. He compared the space industry to the internet. With the internet, there are some companies that own the hardware that moves the information, but there are many more companies that use the internet hardware in order to perform their own service. Amazon.com is one example, in which they have some local computer hardware that interacts with the internet, but their business model is similar to a catalog mail order business.

    NanoRacks started this way, with only the hardware needed to hold its customers’s experiments to orbit and aboard the ISS. NanoRacks provided the service of interacting with the NASA bureaucracy for small companies and universities that did not speak NASA-ese or would clash with the NASA culture.

    Another approach in the US is incubators, where start up companies get help.

    Luxembourg is serious about helping companies get started in space, there. They offer financial assistance, even to companies based outside of the country but do some business there.

    NASA also forms partnerships with companies, which seem to provide more than just knowledge. I’m not sure what a partnership consists of, but I suspect that part of the “price” to the company is that knowledge also flows to NASA to become additional public domain knowledge.

    I think this may be a difference of cultures, where India’s culture — especially its 20th century dabble into socialism — makes the government an entity that is more controlling of its people and industry than in the United States. Late in the previous century, India made a move toward free markets, hopefully with an emphasis on ‘freedom.’

  • Ian C.

    Robert: In April you pointed me to two of your articles/essays, the “forgotten word” and “a fundamental truth.” I agree. And it’s always important to defend it. But that needs awareness.

    A somewhat similar though differently approached but certainly more verbose perspective on it is the first (freely available) chapter of “Birth of Plenty.” An economic history view. I read it once a year to feel good. It’s for a long, rainy night.

    http://www.efficientfrontier.com/ef/404/CH1.HTM

    While we’re talking about India’s launch business, here’s my story (rare opportunity). I was taking care of launch issues for one of the GLXP teams and in 2015 I tried to talk to Antrix, ISRO’s commercial outlet. Their website was an outdated and broken mess, my emails couldn’t produce a reaction, and it was real work to get their phone number. Timezone differences and all that, I called them in the middle of my night during their office hours, which were like 8-10am India time. One day I succeeded. Connection quality was terrible. Couldn’t understand each other. After five minutes he hang up on me and I never reached anybody again. Other countries were more approachable, so business didn’t go to India. Today I could book a slot on a PSLV with one of the rideshare companies, so at least that’s possible.

  • Dick Eagleson

    Edward,

    Amazon started out as strictly an on-line book retailer that was purely a user of Internet services. It has since become one of the half-dozen largest retailers of pretty much everything and also has a subsidiary that owns a substantial fraction of the Internet’s total computing infrastructure. When Bezos builds his Kuiper network of LEO comsats, Amazon will own a significant chunk of the Internet’s total backbone hardware infrastructure and bandwidth as well. Then there’s the nascent Amazon delivery drone “air force” which will incrementally disintermediate conventional logistics companies as well as national postal services. Bezos may be a rival of Elon Musk’s, but the two men seem to see very much eye-to-eye anent the virtues of vertical integration as a business strategy.

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