Analysis: India's space strategy: harness data and tiny satellites to capture market beyond SpaceX

Zen Technologies

14/10/2024 03:30

By Nivedita Bhattacharjee
       BENGALURU, Oct 14 (Reuters) - India has a plan to carve
out a beachhead in the battle for commercial space, officials
say: crunching space data, building small satellites and
launching them cheaply into orbit rather than challenging
heavyweights such as SpaceX head-on.
    In particular, it is taking aim at providing cost-effective
services and hardware to sectors such as communications,
agriculture and commodities, where high-quality data is a
precious resource.
    At stake is a launch market worth $14.54 billion by 2031,
and a related data services market pegged at $45 billion by
2030. 
    "The world has gone from satellites the size of a Boeing
plane to the size of a laptop," said AK Bhatt, director general
of the Indian Space Association, an industry body.
    "This is a sector that India can win, instead of challenging
heavy launches where Elon Musk has dominance. The country
already has an historical advantage in data mining and
interpretation."
    Since February, India has opened its space sector to private
players and created a 10 billion rupee ($119 million) venture
fund to support space startups. It has also unveiled plans for
crewed space exploration and a mission to Venus, but the focus
is on developing commercial ventures.
    In many ways it will be an uphill fight. Other countries
such as Japan and China have advanced space industries, and
designs on cheap launches. Spaceflight itself is difficult; the
startup landscape globally is littered with failed boosters and
satellite designs.
    For India, "the tech is there and the ability is there...
but space is tricky and very competitive, and while private
companies have shown that they can create a niche for
themselves, we need more proof of concept," said Namrata
Goswami, a space policy expert at Arizona State University.
    She added that the Indian government must be an "anchor
customer" for private industry.
    Most of the revenue growth is expected to come from
so-called downstream data applications, said Pawan Goenka,
chairman of IN-SPACe, India's space regulatory body.
    Those involve crunching data from orbit to help improve crop
yields on earth, build more accurate navigation systems, bolster
telecommunications, tighten border security and fight climate
change, Goenka said.
    Indian companies such as Bellatrix Aerospace, Pixxel,
Agnikul Cosmos, Dhruva Space and others are already building or
have launched small satellites or satellite components.
    India's space agency, ISRO, last month completed the third
and final developmental flight for its Small Satellite Launch
Vehicle. The design will then be handed to private companies.
    "The end uses of Earth observation are vast," Goenka said.
"What we are doing is address various parts of the puzzle."
    Bengaluru-based SatSure, for example, has been providing
real-time satellite data to the Airports Authority of India to
enhance air traffic management and safety, helping planes avoid
weather hazards. The project is expected to save 37.5 billion
rupees ($446 million) in fuel costs for airlines annually by
2025 and result in a roughly 70% reduction in airport process
planning timelines, the authority said.
    Earth observation (EO) satellites - orbiting cameras and
sensors - can unlock similar savings in other areas, said the
company's chief executive, Prateep Basu.
    "EO is solving problems that span across utilities,
navigation, trading, industries, helping save millions of
dollars," Basu said.
        
    GOVERNMENT PUSH
    Since the government opened up the market, companies big and
small have jumped in, with legacy IT firms like Infosys
 INFY.NS  investing in satellite imaging company GalaxEye Space
Solutions, Google-backed  GOOG.O  Pixxel signing contracts with
NASA, and Baring- and Promus-backed SatSure taking on clients
such as HDFC Bank  HDBK.NS  and global seed company Syngenta.
    Dhruva Space became one of the first to be handed a permit
to operate satellite communication centres on earth - to date
the dominion of ISRO.
    "India is a software powerhouse and produces some of the
best minds in the world in data science, machine learning, and
artificial intelligence. The space downstream market is, at the
end of the day, a software play," said Aravind Ravichandran,
founder of France-based advisory firm Terrawatch Space.
    The consultancy Euroconsult forecasts that between 2023 and
2032, about 26,104 small satellites - weighing less than 500
kilogrammes (1,100 lb) - will be put in orbit, averaging 1.5
tons of daily launch mass. The firm expects the overall small
satellite industry to be worth $110.5 billion in the next
decade.
        Indian space companies have already seen an influx of
funding - $126 million in 2023, a 7% increase from the $118
million raised in 2022 and an increase of 235% from the $37.6
million raised in 2021, according to Tracxn data. 
    But India has only about 2% of market share in commercial
space activities, demand is still largely dependent on global
clients, and well-established U.S., Russian and Chinese
companies are formidable rivals.
     "To truly make a dent, (Indian) solutions have to scale to
the rest of south Asia and then to the rest of the world," said
Pixxel founder and CEO Awais Ahmed.
    
  

($1 = 84.0560 Indian rupees)

 (Reporting by Nivedita Bhattacharjee in Bengaluru; Editing by
Gerry Doyle and Kim Coghill)
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