India-US Collaboration in Outer Space
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Space Alert Volume V, Issue 1 – January 2017 ORF Quarterly on Space Affairs CONTENTS FROM THE MEDIA FROM THE MEDIA COMMENTARIES • ISRO to soon launch record 83 satellites at once • ISRO’s Mars Mission Successful, India • Team Indus gets slot on PSLV rocket for its Traditional Space and NewSpace - Makes History journey to moon Understanding the Growth Trajectories • ISRO Inks Deal with China for Space • ISRO to launch satellites in tie-up with and their Potential for India’s Space • India Offers Outer Space Expertise to industries Economy Bangladesh • ISRO's expenditure on Mars Mission wasn't By Narayan Prasad • U.S. Dismisses Space Weapons Treaty even Rs. 450 crore The increase in demand for space-based Proposal as “Fundamentally Flawed” • Chronic capacity shortage sends ISRO services in India brings along a unique • NASA Plans to Send Submarine to opportunity to build up systemic capacity to searching for lease of overseas satellite Saturn’s Moon deliver end-to-end space systems for the first • China wins breakthrough contract for Thaicom time in the country. OPINIONStelecommunications AND ANALYSIS satellite • U.S. Air Force awards commercial space- India-U.S. Collaboration in Outer Space surveillance contract By Victoria Samson • The cooperative efforts have largely focused NEW Full Ariane PUBLICATIONS 6 rocket funding is unlocked by on civil space projects, however, there is room ESA for increasing the cross-cutting alliance • Eutelsat, Yahsat bouy Africa’s broadband between the two countries by expanding joint programme efforts to include those that affect security and • Gogo views network upgrades as bulwark stability. against in-flight-connectivity newcomers The Need for India’s Space Policy Is Real OPINIONS AND ANALYSES By Rajeswari Pillai Rajagopalan India for a long time believed that it must NEW PUBLICATIONS maintain an ambiguous position and not clarify how it approached outer space in an EDITORIAL BOARD open policy document. But this is no longer sustainable. India’s outer space policy must be Editor: Dr. Rajeswari Pillai Rajagopalan approached with three key drivers. Associate Editor: Vidya Sagar Reddy 1 Traditional Space and NewSpace - has already accounted commitments of Rs. Understanding the Growth Trajectories 100-150 crore in investments to set up and their Potential for India’s Space facilities that can support the operations Economy required. In the current growth trajectory, Indian industry under the supervision will be Narayan Prasad equipped to deliver rockets and satellites by 2020. With the increase in demand for space-based services in the country with a projection of 70 While these developments are encouraging, operational satellites needed in the country, India is now seeing a growing NewSpace the Indian Space Research Organisation phenomenon. Backed by private investors, (ISRO) is increasing its engagement with the Team Indus is the first Indian private company space industry for both the production of to sign a launch contract with ISRO. satellites and launch vehicles. Bangalore-based space startup Astrome Technologies intends to launch 150 satellites Industry consortiums are being floated for the into space by 2020 providing high-speed production of the Polar Satellite Launch affordable internet to remote locations across Vehicle (PSLV) and the Indian Regional the world. Astrome’s technology and the use Navigation Satellite System (INRSS) of satellite for internet can provide a satellites. This brings along a unique significant boost for the government’s aim to opportunity for the first time in the Indian connect 2,44,729 Gram Panchayats (GPs) in industry ecosystem to build up systemic the country. capacity to be able to deliver end-to-end space systems for the first time in the country. Currently, the government is pursuing the National Optical Fibre Network (NOFN) plan This development in the traditional space of connecting the GPs through the optical fibre industry is based on a two-pronged approach. cable (OFC). According to recent reports OFC One to transition to a state where the industry in 76,728 GPs and optical fibre in 64,599 GPs can achieve the required volumes of has been laid which allows significant room satellites/launch vehicles under ISRO for satellite to contribute to Digital India. supervision while allowing ISRO to focus completely on novel technology development Similarly, NewSpace is also having an effect over a longer horizon period and second being on the downstream ecosystem. Companies possibly getting a leg up for the Make in India such as SatSure are building analytics engines initiative. This is a welcome step in further based on satellite and complimentary sensor maturing the capacity of the Indian industry data to help decision-making purposes by while the industry has both the supervision as governments, insurance and re-insurance well as a customer in ISRO. companies, banks, pesticide and seed companies as well as commodity trading The effect of such increased trust in Indian firms. These are exciting developments in the industry by ISRO shall provide further space industry of India. confidence for the industry to invest into infrastructure that can deliver to ISRO’s In order to understand the possible growth needs. The satellite AIT industry consortium trajectories for traditional and NewSpace to 2 exploit their full potential in developing a companies such as Astrome are developing a scalable space economy in the country, it is completely end-to-end service where the important to understand the key underlying enterprise has complete control on the design, differences between the traditional and development, fabrication and market delivery NewSpace approaches. of the space system which shall provide the service. • Customer Landscape – Traditional space industry approach majorly depends on tax- • Financing Landscape – The traditional space payer funded requirements within the national approaches are based on Small and Medium demand framework administered by a space Enterprises (SMEs) that have serviced the agency. This is a process that several countries space agency with requirements growing have pursued in upgrading the capacity in the systematically to upgrade capacity as the industry. NewSpace tries to build up B2B and demand grows within the space agency. The B2C models which can scale both nationally scope of investment for such upgradation is and internationally without heavily leaning based on performance/asset based guarantees towards traditional space industry approaches with institutional investments limited to banks. for the majority of the business to stay afloat. NewSpace brings a high-risk, high-return scenario where traditional institutional • Technology Landscape – NewSpace financing such as banks are not an option companies try to use novel approaches such as rather attracts venture capital. design using Commercial-Off-The-Shelf (COTS) components while trying to reduce • Growth Landscape – Since traditional space the cost of the overall system while traditional industry approaches mostly depends on the space companies are dictated by legacy space space agency/national requirements mandated agency based approaches. The idea is also to funds as a primary customer the ability to use the approach of fail-fast and iterate scale business limits to large orders moved to quickly to constantly scale. However, this also industry. NewSpace due to its diversified increases the risk of failure. business model approach with possible scaling to international markets brings a high-growth • Product/Service Development Landscape – potential. It should be duly noted that there are Traditional space industry in India has a large number of failures associated with the typically been providing services of startup nature of NewSpace as well. manufacturing according to the final integrator (ISRO) requirements at Tier-2/Tier-3 levels • Exit Landscape – Traditional space industry with the initial technology and knowhow itself approach has exit scenarios are mostly via has also been mostly borrowed from ISRO. Mergers & Acquisitions (M&A) due to a spike Therefore, the traditional space industry will in increased demand within the space tend to gain more traction by working towards agency/national requirements with interest establishing a larger share in from larger corporations to take over such manufacturing/assembly of the systems as opportunities. NewSpace brings along the required by the customer (ISRO) as demand possibility of M&A in consolidation and surges. This is the case with the industry led positive liquidation events for investors and Assembly, Integration and Testing (AIT) of entrepreneurs. A mature ecosystem is satellites and launch vehicles. NewSpace necessary for such exit scenarios. 3 From an Indian context, the argument is not Traditional vs. NewSpace for India rather than enabling the development of the space economy of the country by systematically enabling both these approaches to increase their capacity to deliver systems and services. Both these approaches have the potential to scale the capacity in the Indian industry which is still pre-mature in the ability to design, development, deliver a complete end-to-end space system or a space-based service. NewSpace holds the potential of creating a multiplier effect on the space economy unlike the circulation of tax money that normally happens within traditional space industry approaches. Policy makers in the country need to support NewSpace in India to further catalyse the multiplier effect while