India Needs A Space Law As It Joins An Elite League

Private sector participation in India's space sector is still hampered by lack of a clear legal framework.

<div class="paragraphs"><p>India scripted history as Chandrayaan-3 made a soft landing on the lunar south pole, the first by any country. (Source: ISRO)</p></div>
India scripted history as Chandrayaan-3 made a soft landing on the lunar south pole, the first by any country. (Source: ISRO)

India's recent successes with Chandrayaan-3 and the Aditya-L1 solar probe have positioned it alongside major space-faring nations such as the U.S. and Russia. Yet India lacks its own space laws.

The government has been encouraging private participation in the country's explorations beyond the earth. To that end, the government in 2020 created the Indian National Space Promotion and Authorisation Centre, or IN-SPACe. But a lack of a legal framework hampers progress.

"The promotion of space activities in India rests on the nation’s ability to provide economic stability, a clear and uncomplicated procedure for licencing by a regulatory authority, and incentives for private players," Adithya Variath, a faculty member at the Centre for Research in Air and Space Law, NLU Mumbai, told BQ Prime.

And the country is a signatory to all major international space treaties, including the Outer Space Treaty, the Rescue Agreement, the Liability Convention, the Registration Convention—already ratified by India—and the Moon Treaty.

Moreover, countries like Canada, Germany, the Netherlands, South Africa, and Ukraine, despite not being space technology giants, have established well-defined laws for space activities.

India’s efforts towards having its own space laws stem from its objective of facilitating private sector participation in the space economy, said Iqbal Khan, partner at Shardul Amarchand Mangaldas & Co. This also furthers India’s international treaty obligations and brings it closer to other countries that also have statutory frameworks, he said.

For such a capital-intensive sector, having a statute and underlying rules and regulations enabling private participation provides much-needed clarity and confidence for investment.
Iqbal Khan, Partner, Shardul Amarchand Mangaldas & Co.

Indian Space Policy

The government sought to address the legislative gap by introducing the Indian Space Policy of 2023. Still, space law experts pointed out several inconsistencies.

According to the policy, non-governmental entities have been allowed to own, transport, use, and sell asteroid or space resources acquired in compliance with relevant laws, including India's international commitments.

The policy has also entrusted IN-SPACe with establishing a stable statutory structure to provide fairness to non-governmental entities. It is also a single-window clearance agency for space activities. But the policy document does not provide adequate clarity on the specific powers and responsibilities of IN-SPACe.

"There is a possibility of confusion and conflict in the roles of various other government bodies operating in space and mandated with promoting private partnerships in the space sector," said Anupam Shukla, partner at Pioneer Legal.

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The policy also puts forth ISRO's shift away from manufacturing operational space systems towards research and adding to aspects of national interest.

NewSpace India Ltd., a public sector unit established in 2019 under the Department of Space and serving as ISRO's commercial arm, will manage the manufacturing and operational aspects.

This, however, raises questions over the role of Antrix Corp. It is a government-owned body serving as ISRO's marketing division, dedicated to promoting and, more notably, commercially leveraging space products, offering technical consultancy services, and facilitating the transfer of ISRO-developed technologies.

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Past Efforts

In 2017, a draft Space Activities Bill was introduced. Shukla, however, said it lacked in two major aspects: a lack of free mechanisms for private players participation in space activities and a lack of adequate safeguards for such players.

Variath said the absence of tax incentives or other measures to encourage participation in the sector, in addition to a lack of a legislative framework for governing space activities, makes it an unfavourable market to enter for private players.

Other policies that define Indian space law include the Satellite Communication Policy (Satcom) of 1997, which emphasised satellite communication development, launch capabilities, and private investment in the space industry but was found to be insufficient.

Subsequently, the norms, guidelines, and procedures of the Satcom Policy of 2000 were introduced to regulate satellite system setup by private Indian companies with less than 74% foreign equity. Additionally, the Remote Data Sensing Policy of 2011 allowed the transfer of high-resolution imaging services while safeguarding sensitive defence information.

Yet, there is a major difference between policies and a national law. While policies only reflect the plan of action of the government, laws have binding force.

Advait Luthra, partner at Luthra and Luthra Law Offices, said a robust, holistic, and unambiguous space law would create the required framework for the private sector in India to participate and exponentially add to ISRO's incredible achievements.

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