Syllabus: Science and Technology
Source: PIB
Context: Union Budget 2024-25 proposes to set up ₹1000 crore venture capital fund for the space economy
What are venture capital funds?
A venture capital fund is a type of investment fund that pools money from various investors to invest in early-stage, high-potential start-ups and small businesses. These funds aim to provide capital to companies with strong growth prospects but also higher risk.
Indian Space Economy:
- Current value: ₹6,700 crore, 2% of the global space economy in 2021.
- Projected share: 8% by 2030, 15% by 2047.
- Space start-ups: Increased to nearly 200 in 2024 from 1 in 2022.
- Investment in start-ups: $124.7 million in 2023.
- Indian Space Policy 2023 aims to build a $44 billion space economy.
Emerging trends and their contribution to the Indian space sector:
| Trends | Contribution to the Indian Space Sector |
| Private participation | ISRO promotes private participation, and domestic private space companies have raised over $245 million in funding. India ranks fifth globally in terms of the number of private space firms. |
| International collaboration | ISRO collaborates with countries and international organizations for joint missions and technology transfers. For example, the NASA-ISRO Synthetic Aperture Radar (NISAR) mission is a joint project. |
| Outer planetary missions | India made history by reaching the Martian orbit with the Mangalyaan Mission and is launching Chandrayaan-3, India’s lunar exploration mission, in the first quarter of 2023. |
| Human missions | Gaganyaan, India’s first manned mission to space, is a significant milestone scheduled for 2023. |
| Development of new technologies | ISRO is developing new technologies like reusable launch vehicles and Inflatable Aerodynamic Decelerator (IAD). Agnikul, a domestic startup, successfully tested 3D-printed rocket engines. |
| Expansion of satellite-based services | ISRO provides satellite-based services in remote sensing, navigation, and meteorology. It plans to expand these services and offer satellite-derived data to stimulate innovation. |
Bottlenecks in the Indian space sector:
- Access to Capital: Limited funding for downstream companies, as upstream activities receive major investments.
- Human Resource Constraints: A need for technically inclined marketing personnel, but they tend to prefer established businesses with market-level salaries.
- Monopolization: High capital requirements make it challenging for many players to enter the industry, leading to potential monopolization.
- Funding Disparity: India’s space budget is significantly smaller compared to countries like the US and China.
Measures taken to promote private sector participation in the space industry:
| Measures | Description |
| New Space India Limited (NSIL) | Established to utilize ISRO’s research and development for commercial purposes through Indian industry partners. Announced in Budget 2019. |
| Indian Space Association (ISpA) | Aims to represent the collective voice of the Indian space industry, including leading domestic and global corporations with advanced space and satellite capabilities. |
| National Space Policy 2023 | The government has approved the Indian Space Policy (ISP) 2023, to boost private sector participation and increase investments in the space sector from private companies. |
| ISRO Startup Hub | Launched in 2019, it provides a platform for startups to collaborate with ISRO, access ISRO’s facilities, and benefit from ISRO’s expertise. |
| Space Activities Bill, 2020 | Currently under consideration by the Indian Parliament, this bill would allow private companies to engage in space activities, including satellite launches and space-based services. |
| Other | Technology transfer to private players by ISRO, NSIL/IN-SPACe. International collaborations: NISAR program and Artemis Accords.
100% FDI in some sub-sectors |
Other Recommendations:
A recent report by the Indian Space Association, NASSCOM and Deloitte India suggested adopting OECD’s framework for segmenting the space value chain into upstream, downstream and Auxiliary categories.
- Upstream: All activities, products and infrastructure that ensure development, testing, launching, operations and monitoring of space assets
- Downstream: All applications, services and devices relying on satellites to create business value including Earth Observation, Satellite, SATCOM, etc.
- Auxilliary: Additional space-related activities such as space insurance, awareness, education and training
Conclusion
The Indian space sector has an opportunity to create a vibrant ecosystem for start-ups and private enterprises. India needs to focus on building a comprehensive space policy, providing access to capital for early-stage startups, access to satellite technology for industry, improved training for satellite operations, and allowing private players to use the Indian Space Research Organisation’s (ISRO) testing facilities.
Insta Links
Mains Link:
- What is India’s plan to have its own space station and how will it benefit our space programme? (UPSC 2019)
- Discuss India’s achievements in the field of Space Science and Technology. How the application of this technology has helped India in its socioeconomic development? (UPSC 2016)
Prelims Links
Consider the following statements: (UPSC 2016)
The Mangalyaan launched by ISRO
- is also called the Mars Orbiter Mission
- made India the second country to have a spacecraft orbit the Mars after USA
- made India the only country to be successful in making its spacecraft orbit Mars in its very first attempt
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Ans: C
