Seema Jhingan, Partner, LexCounsel Law Offices
Khyati Bhatia, Associate, LexCounsel Law Offices
After years of missed opportunities, the Government of India has opened the doors to the vast untapped opportunities of private sector participation in the Indian space program. The Central Government has recently approved far reaching reforms in the space sector aimed at boosting private sector participation in the entire range of space activities with the aim of making India self-reliant in space technology.
Background of Indian Space Program and SATCOM Policy
The Department of Space, in partnership with the Department of Telecommunication and the Department of Science and Technology, framed the Satellite Communication Policy in 1997 (SATCOM Policy). Through the SATCOM Policy, the government aimed to develop a strong satellite communication service industry in India and thus, the emphasis of the policy was on (a) developing satellite communication, launch vehicles and ground equipment industry in India; (b) making the infrastructure built through Indian National Satellite System (INSAT) available to a larger segment of the economy; (c) encouraging the investment by private sector in the space industry in India and; (d) attracting foreign investment in the satellite communication sector. The framework of the SATCOM Policy also laid the road map for authorising INSAT capacity to be leased to non-government parties, allowing Indian parties to provide services like uplinking of TV through Indian satellites, authorising Indian administration to inform and register satellite systems and networks and authorising operation of foreign satellites from India.
As the SATCOM Policy did not specify the manner in which the policy can be implemented, the Department of Space, in the year 2000, formulated the norms, guidelines and procedures for implementing the framework of SATCOM Policy. The norms and guidelines issued by the Department of Space focused on the use and development of the INSAT network, preferential treatment to Indian satellites, allocation of capacity for use of Indian satellites by private market players etc.
However, both the SATCOM Policy and the subsequent guidelines, after their initial hype, failed to generate private participation due to due lack of transparency and government interference including from the Indian Space Research Organisation (“ISRO”). The lead author of this article has extensively represented several international space and satellite companies and is aware that these companies struggled to access and enter the Indian space industry but with little success. Only a few applications for setting up the Indian satellite systems were submitted with ISRO and with fewer breakthroughs. As a result, Indian space industry continues to be totally Government controlled, managed, and operated. Even the satellite communication is till date governed by the SATCOM Policy and the norms and guidelines framed in 2000.
Recommendations by the National Digital Communication Policy, 2018
There has been lot of discussion in the past to revamp the existing SATCOM Policy by the Department of Space to make it at par with the emerging trends and consequently, the National Digital Communication Policy, 2018 (NDCP 2018) agreed to a long standing demand of the industry to review the twenty one (21) years old SATCOM Policy. NDCP 2018 accordingly suggested several measures in which the satellite communication technology can be strengthened in India. Some of the recommendations included:
1. Review of regulatory regime for satellite communication: The NDCP 2018 greed that the licensing and regulatory conditions that limit the use of satellite communications, such as speed barriers, band allocation etc. need to be revised, the compliance requirements for VSAT operators need to be simplified for ensuring faster roll outs and the scope of permissible services needs to be expanded for effective utilisation of high throughput satellite systems through appropriate licensing mechanism.
2. Augment satellite communication technologies in India: Review of the SATCOM Policy for communication services in order to create a flexible, technology neutral and competitive regime, keeping in mind the international developments and social and economic needs of the country; making available new spectrum bands for satellite based commercial communication services, assessing the bandwidth demands across various spectrum bands used for satellite communications in consultation with stakeholders.
3. Developing an ecosystem for satellite communication: The SATCOM Policy also needs to focus on streamlining administrative process for assignment and allocations, clearances and permissions related to satellite communication systems, promoting local manufacturing and development of satellite communications related infrastructure through appropriate policies and promoting participation of private players keeping in mind the due regard to national security and sovereignty.
4. Requirements led by 5G and IoT: The government should also take into consideration the growing requirements of revamping the existing SATCOM Policy with the advent of 5G connectivity and Internet of Things.
5. Attract foreign investment in satellite communication sector: NDCP 2018 emphasised that it is important to encourage the investment by private sector in the space industry in India and attract foreign investments in this sector (which is allowed up to 100%, but subject to approval of the Department of Space and ISRO) in order to mainstream the satellite communication in India.
Despite the above recommendations, the SATCOM Policy remained unchanged. COVID 19 and the financial crisis however made the Government of India to introduce reforms in the US$360 billion space market (in which India’s contribution is limited to just 3%). On June 24, 2020, the Department of Space announced establishment of a new regulatory body, named as Indian National Space Promotion and Authorisation Centre (IN-SPACe). The IN-SPACe is intended to provide a level playing field for private companies to use Indian space infrastructure and to promote and guide the private industries in space activities through encouraging policies and a friendly regulatory environment.
In a recent interview, the ISRO Chairman, Mr. K Sivan further explained the proposed role and power of IN-SPACe and confirmed that IN-SPACe will be set up as an independent fourth vertical under ISRO and will not affect the ISRO’s functioning. IN-SPACe will function as an autonomous body and will neither be influenced by ISRO nor it will influence ISRO’s work. Furthermore, the decision of providing the testing facilities or systems of ISRO to private companies will be made by IN-SPACe in consultation with ISRO and once this decision is made it will be binding on the ISRO and other stakeholders.
With the above changes it is expected that the private companies will now have an opportunity to develop their own satellites systems/rockets and use ISRO’s launch facility for a fee to launch them as compared to the earlier role of only supplying the components of rockets and satellites to the ISRO.
Furthermore, the New Space India Limited (NSIL), a public sector enterprise which was established on March 6, 2019 under the administrative control of the Department of Space, will also endeavour to re-orient space activities from a ‘supply driven’ model to a ‘demand driven’ model, thereby ensuring optimum utilization of the space assets.
It is expected that the new reforms will allow ISRO to focus more on research and development activities, new technologies, exploration missions and human spaceflight programmes.
The SATCOM Policy still needs to be amended in tandem with the above NDCP 2018 recommendations and the recent policy announcements. Some of the important aspects that the government would need to ensure are that the regulatory approvals are granted on a time bound manner with minimal delays and there is less operational interference from the government to ensure that the satellite communication can be truly implemented without any hurdles. The concept of IN-SPACe ‘consulting with ISRO’ prior to making decisions should not lead to bureaucratic delays and undue interference. Hopefully, the recent reforms will lead to a spur in the commercialisation of satellite and rocket manufacturing (which was till now exclusively vested with the ISRO) and increase in the space activities.
Seema Jhingan is a Partner at LexCounsel Law Offices.
Khyati Bhatia is an Associate at LexCounsel Law Offices.
Originally published on 3rd July, 2020. COVID-19 related legal updates, please refer to https://lexcounsel.in/newletters/newsletters-2020/ and Mondaq at https://resources.mondaq.com/mir/articles.aspx and for COVID-19 related articles, please refer to https://lexcounsel.in/articles-2020/.