Unlocking the Potentials of Space Sector in India: The Way Forward

Introduction

Space activities in India started in a modest way in early 1960s, has reached a matured self-sustaining programme in all respects, for the past six decades of pursuance at various phases of progress, from initiation to commercialization and expansion. Space activities, which were originally conceived and pursued for national development, have been considered for national security purposes too by the Government and hence the activities were hitherto performed under the governmental envelope by the state institutions with appropriate support from industry and academia.

As part of the overall economic reforms in 2020, the Government has considered Space Sector as one of the contributors to the expansion of industrial base and economic growth of the nation and hence introduced certain structural reforms in space sector too in May 2020. The space sector in India is currently at the threshold of privatization cum commercialization. Indian Space Economy at $7 billion ¹ is just 1.57% of the global space economy, which was pegged at $447 billion in 2020. ²

To capture a reasonable share in the global space economy commensurate with space capabilities of India, the scenario necessitated certain changes in legal and policy directives and institutional mechanisms. Consequent to the announcement on space reforms, the Government had announced the formation of a promotional cum regulatory body, known as Indian Space Promotion and Authorization Centre (IN-SPACe) in June 2020, to encourage private sector participation in entire range of space activities through an institutional mechanism. These developments along with the pros and cons are discussed.

Space Reforms Initiatives 2020—Brief Analysis

The Government has taken a major initiative of introducing reforms in Space Sector in May 2020, under the overall structural reforms across eight sectors paving way for Aatma Nirbhar Bharat. ³ The Space Reforms measures were aimed at boosting private sector participation in the entire range of space activities.

Major objectives under the reforms include ³

Each of the aforementioned points convey action plans of the Government toward fulfilling the intended objectives. The approach of providing a “level playing field for private companies in satellites, launches and space-based services” would consider the private sector at par with the Government sector in terms of pursuance of space activities. Ensuring “Predictable policy and regulatory environment to private players” would demand an appropriate legislation on space activities supported by relevant policies under the scope of the space activities. Although the Government is already in the process of enacting a legislation on space activities, the situation warrants culmination of the process into an enforceable act with rules at the earliest.

The provision on “Access to ISRO facilities and other relevant assets for use by private sector to improve their capacities” is an excellent investment risk sharing gesture of the Government, through which Government is ready to handhold with the private sector. Establishment of facilities for testing the space systems such as satellites for space environment and launch vehicles for reliable performance would not only be cost intensive but time consuming too. These factors would obviously thwart the private sector efforts cum investments. This action plan demands the formulation of suitable policy and procedural guidelines by Department Of Space (DOS) to share their space infrastructure, either free or at nominal charges, but without compromising the schedule requirements of projects for national needs.

Opening the gateway for the “future projects for Planetary Exploration, Outer Space Travel, etc., for Private Sector” could enthuse the private sector to work on long-term plans, despite the fact that it would demand sufficient levels of expertise cum maturity in handling space projects. The activities relating to planetary exploration for scientific studies would not be commercially attractive propositions to private sector; however, building spacecrafts, subsystems, payloads, and launching such missions for national and global scientific institutions could offer challenging opportunities. Furthermore, making collaborative partnerships with foreign companies on space resources mining, space tourism, etc., could be viable possibilities. In this regard, Government's policy on space tourism, space resources mining, etc., on commercial basis would be highly expected.

The topic of “Liberalizing of geo-spatial data policy for providing remote-sensing data to tech-entrepreneurs,” speaks for itself. It offers good potential for entrepreneurs to commercially exploit the geospatial data derived from space and aerial based observations. The Department of Science and Technology has completed this task by announcing liberalized guidelines for geospatial data on February 15, 2021. ⁴ Through the liberalized guidelines, the Government of India acknowledges that the availability of comprehensive, highly accurate, granular, and constantly updated representation of Geospatial Data will significantly benefit diverse sectors of the economy and will significantly boost innovation in the country and greatly enhance the preparedness of the country for emergency response. ⁵

ISRO/DOS too has released Draft Space Based Remote Sensing Policy of India ⁶ (SpaceRS Policy)—2020, for public consultation in November 2020, provides for the Government to—promote Indian Industries to carry out space based remote sensing activities within and outside India; enable easy access to space based remote sensing data, except for “sensitive data and information; provide a timely and responsive regulatory environment for the commercial Indian industry to establish and operate space based remote sensing systems. data policies, etc.

It is stated that through these reforms, private players are entitled participate in—(1) building satellites, (2) building launch vehicles, (3) carry out launches, (4) develop applications and provide space-based services, and (5) develop subsystem and systems for space sector activities. ⁷

In-Space

Consequent to the structural reform initiatives, the Government has approved the Space Reforms, through a Cabinet Meeting on June 24, 2020. ⁸ Through this decision, a promotional cum regulatory body, namely, Indian Space Activities Promotion and Authorization Centre (IN-SPACe) was created to boost the participation of private sector in space activities. Basically, IN-SPACe is intended to provide a level playing field for private companies to use Indian space infrastructure and also hand-hold, promote, and guide the private industries in space activities through encouraging policies and a friendly regulatory environment.

The organization of IN-SPACe, as an independent nodal agency under Department of Space, is contemplated to have a chairman, technical experts for space activities, expert on safety aspects, experts from academia and industries, legal and strategic experts from other departments, members from Prime Minister's Office (PMO) and Ministry of External Affairs (MEA) of Government of India. ⁹ Nominations to these posts are expected to be made. However, it is conveyed that, till such time, the roles of IN-SPACe would be undertaken by the Department of Space. ¹⁰

Authorization Powers of In-Space: A Legal Scrutiny

The concept of establishing a Space Activity Regulatory mechanism to promote and regulate the space activities in India had been spelt out under Section-3 of the Draft Space Activities Bill that was floated for public consultation in 2017. ¹¹ Though the revised Bill after public consultation is yet to seek Parliamentary approval process to become an Act, the announcement on formation of IN-SPACe could be considered as a proactive and forward-looking measure, to cope with the immediate requirements of the private industry to avail the benefits of Space Reforms. This confirms the Article-VI of Outer Space Treaty, 1967, which obligates a state party to exercise the roles of “Authorization and Continuing Supervision” on space activities of nongovernmental entities (NGEs), besides taking international responsibility on all national space activities including that of NGEs.

It is mandatory to a state party to comply with the United Nations (UN) treaty obligations and implement them through domestic legislations. In the absence of implementing domestic act (Space Activities Act, in this case), a state party could be discharging such obligations through contractual means. However, the effectiveness of enforcement of such authorizations in case of any huge liability burdens at national or international levels and associated disputes, and even to exercise continuing supervisions, might not be supportive. An authorization through law is the preferable, most comprehensive, and transparent means of exercising supervision and control and ensure proper domestic handling of international liabilities.^12,13

Generally, a regulatory authority draws its power to regulate and manage its affairs through a substantive legislation. The authorization of IN-SPACe was approved by the Union Cabinet as part of the Space Reform announced in Cabinet Meeting. It is pertinent to note that the Cabinet is the policy-making body, which is collectively responsible to Parliament and co-ordinates the work of government departments. ¹⁴ Neither the Cabinet nor the Prime Minister, as such, claims to exercise any powers conferred by law. ¹⁵ When the Cabinet has determined on a policy, the appropriate department carries it out, either by administrative action within the law or by drafting a bill to be submitted to Parliament so as to change the law. ¹⁴

Therefore, IN-SPACe, which has been established pursuant to Space Reforms Cabinet Meeting, lacks the appropriate legislative backbone to exercise rule-making powers. Any guidelines, instructions, directions issued by IN-SPACe currently operates under legislative vacuum which is open to an argument that such instructions or directions are merely executive fiats or departmental actions which could be challenged on various grounds including that executive instructions cannot be termed as law within the meaning of Article 13(3)(a) of the Constitution.^16–18 The Supreme Court in the matter of M/s. Bishamber Dayal Chandra Mohan v. State of U.P. and Ors. explained the difference in a statutory order and an executive order observing that executive instruction issued under Article 162 of the Constitution does not amount to law.

However, if an order can be referred to a statutory provision and held to have been passed under the said statutory provision, it would not be merely an executive fiat but an order under the Statute having statutory force for the reason that it would be a positive State made law. So, to examine as to whether an order has a statutory force, the Court has to find out and determine as to whether it can be referred to the provision of the Statute. ¹⁹ Therefore, it could lead to a conclusion that IN-SPACe in the present context is only a nonstatutory body. It is recommended that the rights and obligations of IN-SPACe as well as private entities that are proposed to be regulated by IN-SPACe must be cast in legal certainty. However, promotional roles could be supported under applicable policy guidelines.

Analogy with Telecom Regulatory Authority of India

In February 1993, the Finance Minister in his budget speech announced Government's intention to encourage private sector involvement and participation in telecom to supplement efforts of Department of Telecommunications (DoT) especially in creation of internationally competitive industry. On May 13, 1994, National Telecom Policy (NTP) was announced, which was placed in the Parliament saying that the aim of the policy was to supplement the effort of the DoT in providing telecommunications services.

Later, guidelines for induction of private sector into basic telephone services were announced and a committee was set up to draft the tender documents for basic telephone services. Pursuant to the notice inviting tenders, tenders were submitted for different circles but before licences could be granted by the Central Government, writ petitions were filed in different High Courts as well as the Supreme Court. The Supreme Court batched all writ petitions together in the matter of Delhi Science Forum & Ors vs Union Of India. ²⁰

The Supreme Court in its judgment dated February 19, 1996 refused to review the policy decisions of the Government based on settled principles of judicial review; however, remarked that “the existence of a Telecom Regulatory Authority with the appropriate powers is essential for introduction of plurality in the Telecom Sector. The National Telecom Policy is a historic departure from the practice followed during the past century. Since the private sector will have to contribute more to the development of the telecom network than DOT/MTNL in the next few years, the role of an independent Telecom Regulatory Authority with appropriate powers need not be impressed, which can harness the individual appetite for private gains, for social ends. The Central Government and the Telecom Regulatory Authority have not to behave like sleeping trustees, but have to function as active trustees for the public good.” ²⁰

Thereafter, an independent statutory body was established as Telecom Regulatory Authority of India (“TRAI”) to regulate the telecommunication services and matters connected therewith under the promulgation of the Telecom Regulatory Authority of India Act, 1997 (“TRAI Act”).

Dispute Resolution Mechanism

IN-SPACe proposes to settle the disputes if any with regard to monitoring of the licensee's space activities in compliance with terms of authorization, could be addressed through Telecom Disputes Settlement and Appellate Tribunal (TDSAT). ²¹ The extension of the scope of TDSAT to space activities needs to be studied with regard to its formation to adjudicate disputes and dispose of appeals in telecom sector, and subsequent extension of its jurisdiction to Broadcasting and Cable services, Information Technology (IT), and Airport tariff.

Originally TRAI was established with adjudicatory powers under the TRAI Act. This was challenged before the Delhi High Court on the ground that TRAI did not possess jurisdiction to issue directions to DoT in the latter's capacity as Licensor, which was upheld by the High Court. ²² Consequent to this issue, to bring in functional clarity and strengthen the regulatory framework and the disputes settlement mechanism in the telecommunication sector, the TRAI Act of 1997 was amended in the year 2000, to set up TDSAT.

TDSAT was entrusted with the authority to adjudicate disputes and dispose of appeals with a view to protect the interests of service providers and consumers of the telecom sector and to promote and ensure orderly growth of the telecom sector. In January 2004, the Government included broadcasting and cable services also within the purview of TRAI Act. After coming into force of the relevant provisions of the Finance Act 2017, the jurisdiction of TDSAT stands extended to matters that lay before the Cyber Appellate Tribunal and also the Airport Economic Regulatory Authority Appellate Tribunal.

Notably, the TDSAT was empowered to exercise its jurisdiction over Telecom, Broadcasting, IT, and Airport tariff matters under the applicable legislations of the relevant subject areas—the TRAI Act, 1997 (as amended), the Information Technology Act, 2008 and the Airport Economic Regulatory Authority of India Act, 2008. In this context, proposal to extend the jurisdiction of TDSAT to Space activities might not be supported, in the absence of Space Activities Act, and a corresponding amendment of the TRAI Act, as has been done by the Government for the Broadcasting, IT, and Airports Tariff matters.

It is also to be noted that TDSAT is only an appellate body and not a forum of first instance. The forum of first instance for grievance redressal must be either IN-SPACe with appropriate legislative and statutory powers or an independent Space Regulatory Authority established under the Space Activities Act. Second, designating TDSAT as an appellate authority begets the question if TDSAT has the wherewithal to deal with another specialized subject, given the large number of pending cases with TDSAT and the lack of expertise in dealing with such specialized areas of high technology.

Space Activities Bill

As a result of efforts toward formulating a national space legislation, a Draft Space Activities Bill was put in public domain in end 2017 seeking comments from all stake holders, as part of public consultation. The main purpose of the legislation is to make an impact on growth of space activities for the benefit of national development. After public consultation, as the Bill is currently in the final stages ²³ of formulation, it is not intended to provide detailed comments on it, at this juncture. Whereas it is chosen to provide specific comments, based on the enhanced scope of private sector space activities provided under the Space Reforms initiatives.

The scope of the Draft Bill was pinned on the definition on “Space activity”—Sec 2.f-“space activity” means the launch of any space object, use of space object, operation, guidance and entry of space object into and from outer space and all functions for performing the said activities including the procurement of the objects for the said purposes. The term, “use of Space object” may have to be clearly spelt out in the context of current/emerging trends of space activities, besides the basic function of communication, earth observation and navigation services for civil, commercial, and national security purposes.

Private ventures in other countries are leveraging funds to try and demonstrate commercial viability case scenario for space resources mining, and utilization, active removal of space debris, on-orbit servicing of spacecraft, space tourism, space colonization, space power generation, etc. The Space Reforms initiatives, with a forward-looking approach, paving way for the planetary exploration and outer space travel to private sector, obviously for commercial benefits, is a case in point.

Appropriate provision to facilitate the access to government space infrastructure under regulatory mechanism needs to be included under Chapter II-Space Regulatory Mechanism. Toward implementation of this provision by IN-SPACe, detailed policy guidelines on such matters may have to be evolved.

Furthermore, the overall provisions under Chapter-II Space Regulatory Mechanism (Sec-3 and 4) necessitates fine-tuning to reflect suitably the scope and objectives of IN-SPACe.

Providing sufficient clarity on risk sharing mechanism with regard to liability for damages caused by space objects, as spelt out under Sec-12 (1) and (2) of the Draft Bill would encourage the new entrants, especially start-ups to pursue the space launch and operation activities with confidence. International practices on such risk sharing mechanism with caps on liabilities on licensees, and special considerations for experimental launches, etc. could be considered and reflected in the Bare Act and elaborated through subordinate legislations.

Inclusion of a provision on dispute settlement mechanism would address the issues raised in the previous section.

The Section 25 of the Draft Bill, on Protection of Intellectual Property Rights (IPR) deserve a revisit cum revision in the context of recent Space Reforms Initiatives. Entitlement to protect the IPRs that are created independently by the private sector space industry in the course of pursuance of space activities either on ground or outer space would certainly encourage them to work on innovative technologies. Government's interests in such cases would not be prejudiced, as there exit sufficient caveats in the IPR laws of India (e.g., Sec-100 of Indian Patents Act, 1970).

Conclusion

Space Reforms Initiatives 2020 are very apt and timely in the context of boosting private sector space industry to participate in space activities in full-fledged manner and thereby compete in the space commerce at national and global levels. These reforms have started yielding good results in India's private space. It is reported that IN-SPACe has received twenty two proposals from Indian firms and institutions and four from foreign companies. ²⁴ Few start-up industries have already started working with ISRO through formal arrangements entered into with the Department of Space. ²⁵ Another start-up engaged in developing remote sensing satellite constellation has signed a commercial launch service agreement with New Space India Limited for launching its first satellite by Polar Satellite Launch Vechicle (PSLV). ²⁶

As per the Economic Survey 2020–2021, over 40 funded start-ups are working in India in the space segment and the number is likely to increase in the coming years. ²⁷ The current and emerging scenario justifies the need for casting the rights and obligations of IN-SPACe as well as private entities in legal certainty through a national legislation on space activities in India. It would also support India to effectively discharge its obligations under UN Treaties on Outer Space activities.