Amid the positive momentum in the uptake of 5G services in India, the importance of satellite communication (satcom) services cannot be overlooked. Satcom will play a crucial role in the country’s aim to become a digitally empowered nation and the third-largest economy in the world. India has significant potential for space-based solutions to meet the growing demand for work-from-home set-ups, over-the-top (OTT) media services, mobile banking, online education, and other applications. A report by KPMG, released in 2024, estimated that the country’s satcom sector, which currently stands at $2.3 billion, will reach $20 billion by 2028. In this context, the next big step for India is to leverage satcom services to further connect the country, especially the remote regions.

Policy framework

The Indian government has undertaken numerous initiatives within its policy framework to boost the space sector. In June 2020, it announced its plans to open the space sector, aiming to boost private sector participation across all space-related activities. This initiative resulted in the release of the Indian Space Policy 2023 in April 2023, which clearly delineates the roles of all entities involved in the nation’s space sector. It also specifies the range of space activities that require authorisation from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).

A look at the recent policy developments in the space sector in India…

100 per cent FDI

In February 2024, the Union Cabinet approved significant amendments to the foreign direct investment (FDI) policy applicable to the space sector. Under these amendments, 100 per cent FDI is now permitted, with specific sub-limits for different subsectors. For satellite manufacturing and operation, satellite data products, and the ground and user segments, FDI of up to 74 per cent is allowed through the automatic route. Any investment beyond this limit requires government approval. In the subsector involving launch vehicles and associated systems or subsystems, as well as the creation of spaceports for launching and receiving spacecraft, FDI through the automatic route is permitted up to 49 per cent, with investments beyond this requiring government clearance. Notably, 100 per cent FDI under the automatic route is now permitted for manufacturing components and systems/subsystems for satellites, the ground segment and the user segment.

By clarifying the limits on foreign investment applicable for various space-related activities, these FDI policy amendments aim to attract substantial foreign investment into the space sector, particularly satellite communications.

Spectrum allocation

With respect to satellite spectrum allocation, the Indian Telecommunications Act, 2023 directs spectrum for certain satellite-based services to be allocated through an administrative process, bypassing the need for spectrum auctions. Services benefiting from this administrative allocation include global mobile personal communications by satellite (GMPCS), national long distance, international long distance, mobile satellite services in L and S bands, teleports, television channels, direct-to-home services, headend-in-the-sky services, digital satellite news gathering, and very small aperture terminal (VSAT).

Indian Space Policy 2023 guidelines

The Indian Space Policy 2023 has identified various space activities that necessitate IN-SPACe authorisation. In line with this, IN-SPACe released the norms, guidelines and procedures (NGPs) in May 2024. The NGP document encompasses a wide array of verticals requiring authorisation, including space-based communication, the establishment and operation of remote sensing and amateur satellite systems, access to Indian orbital resources for Indian entities, the dissemination of space-based earth observation and remote sensing data, the operation of space transportation systems, and the establishment and operation of ground systems. It also addresses liability-related aspects and the registration of space objects.

The NGP document outlines the space activities that require IN-SPACe authorisation, sets criteria for granting such authorisations and provides necessary guidelines and prerequisites for applicants. It aims to support the government’s efforts to create a predictable regulatory regime, enhance transparency, and facilitate ease of doing business in the Indian space sector.

According to the NGP document, any entity (Indian or foreign) conducting space activities from Indian territory, its exclusive economic zone or within its jurisdiction, must obtain authorisation from IN-SPACe. This requirement applies to a wide range of activities, including launching, operating, guiding and planning the re-entry of space objects, establishing communication and remote sensing satellites, hosting payloads, operating space transportation systems and disseminating high resolution remote sensing data concerning the Indian territory.

The document also states that only Indian entities can directly apply for IN-SPACe authorisation. Non-Indian entities wishing to conduct space activities in the country must apply through an Indian entity, which could be its Indian subsidiary, joint venture (JV) or another government-recognised collaboration arrangement. Meanwhile, authorised representatives or dealers of non-Indian entities can seek IN-SPACe authorisation for specific categories, such as the authorisation of non-Indian geosynchronous orbit and non-geostationary orbit satellite constellations, to provide communication services and disseminate space-based earth observation and remote sensing data in India.

The NGP document also details the process for registering space objects in India’s national registry. It mandates operators to provide comprehensive information about their space objects, ensuring compliance with space debris mitigation guidelines and operational safety protocols. These comprehensive measures are designed to foster a robust and dynamic space sector, encouraging both domestic and international participation.

Recent market developments

India is rapidly advancing towards the launch of commercial satellite-based communication services, with a growing interest among internet service providers in the Indian market. Eutelsat OneWeb India, Jio Satellite Communications Limited, Starlink and Kuiper Systems are all in the process of securing the necessary licences to offer satcom services in the country.

In November 2023, the government granted licences to Jio Satellite Communications and OneWeb to provide broadband services to end-consumers via satellite. Both companies obtained pan-India internet service provider (ISP) licences, crucial for delivering internet connectivity to users through satellite or mobile networks. The Department of Telecommunications (DoT) issued ISP A (national area) and VSAT licences to OneWeb, while Jio Satellite received an ISP license. With these GMPCS and ISP licences, OneWeb and Jio Satellite are poised to commercially launch satellite-based internet services.

With this, Orbit Connect India, a JV between Jio Platforms and Luxembourg-based SES, received approval from IN-SPACe in June 2024 to operate satellites for high speed internet in India. The JV was granted three approvals in April and June 2024, allowing Orbit Connect to position satellites over the country. However, further approvals from DoT are still needed to commence services.

In another remarkable move, Reliance Jio successfully demonstrated India’s first satellite-based giga fibre service, providing high speed broadband to previously inaccessible regions within India. The new satellite broadband service, called JioSpaceFiber, showcased Jio’s capability to deliver cutting-edge connectivity solutions.

Investment and start-up landscape

Currently, India ranks fourth globally in terms of investments in the satcom sector, with nearly $2 billion invested. The country also ranks fifth in terms of the private space companies and start-up ecosystem. India’s vibrant start-up ecosystem is a significant component of its satcom sector. Industry data indicates a sharp increase in interest from Indian start-ups, with the number of space-focused start-ups growing from just one in 2022 to 200 in 2024. In 2023 alone, nearly Rs 10 billion was invested in the country’s space sector within just eight months.

To further promote the sector, greater participation through support for pilot projects, financing at the ideation stage and creating a robust platform for collaboration between businesses and academia is essential. These steps can help jump-start the satcom sector, driving innovation and growth.

The road ahead

Industry stakeholders believe that as satcom technology becomes more affordable and easier to adopt, extending the digital network infrastructure will help connect the remotest and disconnected parts of the country. Liberalising regulations to attract FDI and simplifying technology transfer norms will remove other bottlenecks impeding satcom growth. Moreover, fostering close collaboration between the government and the private sector to develop and enhance satcom technology-based solutions is essential. This can address significant barriers, such as technological challenges and investment risks, ensuring a more robust and resilient satcom infrastructure.

Looking ahead, India’s share in the global space economy is set to rise significantly. In 2021, the Indian space industry contributed 2 per cent to the global share. This is expected to increase to 8 per cent by 2030 and further to 15 per cent by 2047.

Satcom plays a crucial role in providing essential services and fostering technological advancements. By accelerating efforts in this domain, India can significantly enhance its digital infrastructure, in line with its vision of becoming a digitally empowered nation and a major global economy.

Niha