India's space economy could grow to $44 billion in 10 years, and private sector may have a big role

Speaking exclusively to CNBC-TV18, ISRO Chairman S Somnath, IN-SPAC-e Chairman Pawan Goenka, Tata Nelco MD PJ Nath and L&T Advisor Jayant Patil shared their views on the white paper and vision for the private sector in the space economy.

Pawan Goenka, who spearheaded consultations on the white paper between the industry and government, said that achieving a $44-billion economy would need an enabling policy environment and bigger bets by the private sector.

"The Indian Space Policy is already out and FDI policy is about to be released. ISRO has started handholding the private sector with expertise. We now need startups to take larger bets in the space sector, legacy companies must grow from just being suppliers to ISRO, to playing a bigger role with technology and systems," he said.

ISRO Chairman S Somanath said that the success of Chandrayaan-3 has opened up many more avenues for the private sector. He emphasised that the new space policy does not bar the private sector from investing in any technology in the space sector.

"We may take up more missions on the Moon, and the possibility of sending a man to other planets cannot be ruled out. We are looking at scientific expansion like missions to Venus, Mars and other planets," said Somanath. ISRO has said that launch vehicle building, satellite building, space debris and space situational awareness are huge opportunities for the private sector.

Somanath added that the bigger pie for the space economy will be downstream and the private sector needs to concentrate there to drive higher technology domains like satellite building and launch vehicle operations.

Larsen & Toubro has been a supplier for ISRO for the past 52 years. Industry veteran, and advisor to L&T for Defence and Smart Technologies, Jayant Patil said that the government must look at ways to reduce the cost of capital for the space industry with a focus on increasing exports.

"We are looking forward to growing on the upstream side. We are gradually now moving towards our own launch vehicle in eight months’ time. L&T would like to put money into building sub-components to complete systems and in end-to-end servicing of platforms. We are working to increase our capability, from 8-10 launches a year to 25-30 launches a year," said Patil.

Reacting to the white paper, Tata Nelco said that the company sees huge opportunities for growth in the enterprise market, aero IFC and maritime communications.

"We are providing in-flight communications for international flights, and see a huge opportunity for internet services in domestic airlines. Direct-to-device will be a big market opportunity with 5G satellites coming in. We are focused on India at the moment, but we have global ambitions and we will become a global service provider in the near future. Hope L & S frequency bands are opened up and this will provide a huge opportunity going forward," said PJ Nath, MD and CEO of Tata Nelco.

The white paper said that the government can explore access to finance through incentives, budget allocations, grants in aid and co-investments. Private Equity, venture capital, and angel investments can help promote innovation in start-ups, along with debt financing schemes.

Between 2020 and 2021, global private investments in the space sector were around $76 billion, of which venture capital firms invested 50% of the funds and 25% came from private equity investors.