Takshashila Issue Brief - Demand for Space Launch Services in India
Published on 5th July, 2024.
ISRO chairman S. Somnath recently highlighted the lack of domestic demand for launch services in India. The Polar Satellite Launch Vehicle (PSLV) was used in three commercial launches in 2022 and 2023, but there have been no launches in 2024.
There are two main reasons for the fall in demand for launch services. Firstly, there is a lack of satellite payloads from traditional customers - ISRO and the government, who were crucial in sustaining the launch market. Secondly, there haven’t been many launches for satellite constellations in India.
Change in Government’s Approach
The government established NewSpace India Limited (NSIL), a central public sector enterprise, as ISRO's commercial arm. One of NSIL's main functions was to build and launch satellites based on market demand. This approach has led to a decrease in the launch of ISRO-built satellites, as NSIL now seeks end customers prior to actual launch.
Satellite Constellations
Satellite communications (SATCOM) hold tremendous potential as more of its applications reach commercial viability. One critical application of SATCOM is providing internet services via satellites from low Earth orbit. These services are delivered by large constellations of satellites, the largest of which is presently Starlink, which consists of over 6,000 satellites and is projected to grow to 12,000, potentially reaching 42,000 satellites. The deployment of these satellite constellations is driving demand for launch services globally. Even ISRO's LVM3 rocket carried 72 OneWeb satellites across two launches in 2022 and 2023, which marks the first instance of Indian rockets launching satellites for space-based internet. OneWeb has also used Soyuz and Falcon 9 rockets in the past. As more satellite constellations are expected to be launched in the coming months and years, the demand for launch services will steadily increase.
Build Competence
Indian rockets must compete in the global launch market to meet this potential demand. ISRO’s priority must be to drive costs down. Despite being praised for their low-cost launches, ISRO faces stiff global competition from companies like SpaceX, which have already implemented and tested reusable launch technology. This technology enables SpaceX to offer more competitive prices per kilogram of payload.
Government Procurement
In the domestic arena, the primary impetus for driving demand needs to originate from the government. For the foreseeable future, it is crucial for the government to assume the role of the anchor customer, providing stability and certainty to the burgeoning space ecosystem. This support will not only catalyse the expansion of space launch industries but also foster local development and spur innovation within the sector.
The success of the private space sector in the US can be attributed to the strategic allocation of contracts to private entities by government agencies such as NASA and the Department of Defense. These contracts have played a key role in stimulating and maintaining the demand for space technology services by offering stability and predictability to the space industry. This has been particularly vital in the space launch services sector, which is fraught with high risks and significant chances of failure.
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