India’s Commercial Space Conundrum

A version of this post appeared in the July 2016 Issue of Space Alert published by the Observer Research  Foundation.

A head on dispute of sorts has arisen between the commercial space industry in the United States and India with regards to the small-sat launch business. The underlying issue is the surge of private investment in the United States for small-sat ventures, including existing small-sat systems and proposed small-sat constellations. Currently there are a few dedicated U.S. launchers for this class of satellites, but the number of dedicated small-sat launchers stands to increase between private investment in companies like Virgin Galactic, Rocket Labs and Firefly Space System and the government-sponsored Venture Class Launch Services, which is a NASA program to develop a dedicated small-sat launch system for government payloads. The result being the vacuum of dedicated small-sat launchers will likely be filled via the commercial space industry facilitated by the private interest U.S. domestic space law creates.

At issue with this planned expansion of U.S. small-sat launchers is India’s desire to enter this market with its Polar Satellite Launch Vehicle (PSLV) through the Antrix Corporation Ltd., which is the commercial arm of India’s space programme.  U.S. satellite operators have been banned from launching on Indian launchers since 2005 because of failure of the U.S. and India to finalize and sign a Commercial Space Launch Agreement (CSLA), which is a proposed bi-lateral treaty between the U.S. and India designed to protect the nascent U.S. commercial space launch industry from foreign government-subsidized launch providers like Antrix Corporation.

A significant term of the CSLA is its requirement for government-owned, non-U.S. launch providers to set their minimum prices to those offered by American commercial launch providers. In other words, the CSLA would require India’s government owned launch provider to set its minimum price for a launch on PSLV consistent with the minimum prices offered by the U.S. commercial launch industry. This stipulation has proven unacceptable to the Indian government and moved the FAA Commercial Space Transportation Advisory Committee (COMSTAC) and the FAA to voice their dissent towards the CSLA and the US Trade Representative to recommend the ban remain in place.

The continued ban amounts to protectionism for U.S. for not only available commercial launch providers but for dedicated U.S. small-sat launchers in the process of development even though the U.S. Trade Representative has granted waivers on a case-by-case basis. Otherwise allowing U.S. small-sat operators carte blanch to take advantage of PSLV’s subsidized launch prices and book manifest on India’s launcher could destroy the small-sat launcher industry before it becomes available.

Even if domestic small-sat launchers do not come to fruition to meet the demands of the small-sat industry, launch providers such as ULA, Space X and Orbital/ATK would still be at a price disadvantage to the PSLV. There is the remote possibility if dedicated U.S. small-sat launchers do not come on line in time to meet demand, small-sat operators could lobby the U.S. government in opposition to the launch provider lobby to lift the ban and allow them to take advantage of India’s ready capability to deploy their constellations, but unless the U.S. Trade Representative decides to scrap the ban, the likelihood is it will remain in place regardless of the small-sat operator lobbying efforts as India is unlikely to acquiesce to the CSLA’s pricing terms.

Despite its seeming geopolitical and protectionist characteristics, the small-sat launch dilemma and the impasse over the CSLA is not the root of the problem. Rather, the core of the discord over the small-sat launch issue resides in India’s intermingled ambitions to participate in commercial space ventures and maintain government control over space activities.  This is exemplified in India’s reluctance to adopt a coherent domestic space policy and by extension a domestic space law to enact that policy. India appears indifferent to the possibility of creating a domestic space policy that would endorse the creation of a private interest in commercial space activities and allow domestic entities to develop small-sat launch capabilities through private investment and enterprise and abrogate the need for a CSLA with the U.S.

The call for an Indian domestic space policy and space law is not new. There have been appeals by academics and non-governmental organizations to develop a domestic space policy and expand India’s participation into the growing commercial space community, yet India’s government is seemingly disinterested. India’s reluctance to adopt a space policy and create a private interest for outer space activities might have its roots in national security concerns and how its geopolitical neighbors China and Pakistan might interpret India granting its citizens the authority to build small-sat launchers, which could serve a dual-use purpose as a weapon.

Despite the potential national security and geopolitical consequences, India’s reluctance to create a legal regime for commercial space is unusual considering countries like New Zealand are set to enact commercial space law and regulations to facilitate small-sat launches by Firefly Space Systems, which would compete with PSLV, and with laws passed by Denmark and future laws to be passed by the UAE, China and others. With that said, the foremost reason has more to do with internal politics than external security and the arrangement the Indian government has with Antrix to funnel commercial launches to PSLV and the resultant revenue stream the Indian government enjoys. Dedicated small-sat launchers built by private Indian entities or foreign entities who subject themselves to India’s jurisdiction would compete directly with and out-pace the current commercial space launch archetype favored by India’s government.

India is primed to become a player in the commercial space but its continued reticence to create a legal and regulatory regime to allow commercial space activities by its private citizens risks its space industry to be left behind. Whatever the rationale for India’s reluctance to adopt a space policy and a true commercial space scheme, it pales in comparison to the long-term benefits and positive geopolitical effect in terms of prestige.  The question is will India continue to entrench its commercial ambitions with PSLV and hope the U.S. decides to end the gestalt over the CSLA  and continue its dance around its commercial space conundrum or will it take a bold step forward and embrace the regime of a commercial space industry driven by it private citizens?

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