In a significant development for satellite communication in India, Amazon's Project Kuiper and Starlink submitted applications to the Indian National Space Promotion and Authorisation Centre (“IN-SPACE”) in July 2024 seeking landing rights in India to deploy their global low-earth orbit satellite constellation capacities. These applications were made in accordance with the IN-SPACe Norms, Guidelines, and Procedures (“NGP”) released on 4 May 2024, which were designed to facilitate the implementation of the Indian Space Policy-2023.
NGP was released shortly after the amendment to the Foreign Direct Policy of India (“FDI Policy”) in February 2024, which permitted foreign investment in the space sector, which was previously regulated. The amended policy outlines different entry routes for various space related activities, segregated basis underlying activities of the Indian company. For more details on the FDI amendment, please refer to our article here.
This article aims to provide an overview of the NGP and the current legal regime regulating the space related activities.
Activities Regulated by NGP
NGP regulates, inter alia, the establishment and operation of space objects, including various satellite systems and hosted payloads. It also regulates the operation of space transportation systems for sub-orbital and orbital launches, planned re-entry of space objects, and the operation of ground systems like satellite control centers. The dissemination of space-based earth observation data, especially high-resolution data related to Indian territory, is also covered.
Entities eligible to undertake activities in Indian space
Only Indian entities, encompassing both governmental and non-governmental entities, can operate in Indian Space under the NGP. Non-Indian entities wishing to operate within India can obtain authorisations through Indian entities using various corporate structures such as subsidiaries, joint ventures, partnerships, or trusts, as outlined in the NGP. However, for specific activities like communication services and the distribution of space-based earth observation and remote sensing data, non-Indian entities can directly approach IN-SPACe for authorisation.
Importance of Indian control
The NGP is designed with the objective of ensuring that activities in sensitive sectors like space are conducted by entities under the control of Indian citizens. This objective is manifested in the stipulated minimum Indian control in the permissible corporate structures. For instance, the NGP mandates that a majority of key managerial positions, including but not limited to the Chief Executive Officer (CEO), Managing Director, Manager, Company Secretary, Whole-time Director, Chief Financial Officer (CFO), and Chief Operating Officer (COO), must be occupied by Indian citizens. Additionally, NGP also specifies that any change in shareholding of the licensed entity should be communicated to IN-SPACE and any change that leads to a change in control requires reauthorisation.
Procedure for application
Further, to ensure ease of business in the space sector, the NGP provides a single portal, the INSPACE Digital Platform (IDP), to seek authorisation from IN-SPACE. The application form requires varying degrees of compliance and disclosure based on the proposed activity. However, all applicants must provide financial and technical credentials, operational and infrastructural capabilities, net worth, details of significant beneficial owners (if any), criminal records, and obtain security clearance if required by IN-SPACe.
Conclusion
The amended FDI Policy and the NGP clearly demonstrate the Government of India's intent to boost private sector participation in the Indian space sector and increase India's share in the global space economy from less than two percent to ten percent.
Interestingly, the NGP also aims to harness the talent in the Indian space sector by mandating Indian management and control. Further NGP’s directive for post-facto notifications to IN-SPACe from authorised entities about any changes in shareholding patterns, key managerial personnel, or equivalent changes in partnerships or trusts signifies the intent of IN-SPACE to have significant control on Indian space companies at all stages.
While these requirements align with the government's policy of promoting indigenous space capabilities and protecting strategic assets, they could potentially increase the compliance burden for entities in this sector. Non-compliance could result in severe consequences, such as the revocation of authorisation. Therefore, all entities authorised under the NGP should ensure strict compliance with its provisions and establish specific processes to meet its stringent requirements.
