Norms, Guidelines And Procedures For Implementation Of Indian Space Policy And Space Activities

In an important step for the growth of India's space sector, the Indian National Space Promotion and Authorization Centre ("IN-SPACe") on May 3, 2024, notified the "Norms, Guidelines and Procedures for Implementation of Indian Space Policy-2023 in respect of Authorization of Space Activities" ("NGP")¹. The NGP details a list of space activities (such as establishment and/or operation of space objects and satellite systems, operation of space transportation systems, establishment and/or operation of the ground systems, launch and operation of launch vehicles etc.) for which an authorization will need to be obtained by an Indian entity from IN-SPACe ("Authorization"), the criteria for granting the Authorization and necessary conditions/guidelines to be adhered to by an Applicant ("Applicant")². Earlier, in April 2023, the Government of India ("GoI") released the Indian Space Policy ("ISP 2023")³ which detailed the space activities that would require the Authorisation of IN-SPACe and the roles of various departments of GoI.

The focus of this article is to discuss the obligations of the space entrepreneur i.e., the Applicant once the Authorization has been granted and the rights and powers of IN-SPACe under NGP.

A. Key Obligations of the Applicant under NGP for operating and managing space objects and undertaking space activities

Once the Authorization has been granted by IN-SPACe, the Applicant will need to adhere and comply with various conditions stipulated in the Authorization read with the terms and conditions of NGP and some of the critical conditions are detailed below:

1. Change in Management and Control: Any change in its 'Management and Control⁴' or shareholding pattern of the Applicant will need to be informed to IN-SPACe in writing, within 48 (forty-eight) hours of such change. IN-SPACe may issue fresh Authorization in case of transfer of the 'Control' to non-Indian entity/entities or if the Applicant is no longer under Indian Management and Control.
2. Non-Transferrable Authorization: The Applicant cannot transfer the Authorization to any third parties except with the prior written approval of IN-SPACe, which may be granted at its sole discretion on fulfilment of various conditions including the execution of an unconditional performance guarantee by the exiting Applicant acting as a surety of compliance and performance by the prospective transferee.
3. Misrepresentation of Information: The Applicant needs to provide correct information for seeking the Authorization and if any information provided in the application or otherwise is found to be, or becomes incorrect or false at any stage, IN-SPACe reserves the right to withdraw the Authorization from the Applicant and exercise all remedies available under law to recover the losses suffered by IN-SPACe or the GoI.
4. Compliance with Law: The Applicant should not carry out any space activities which violates any international or applicable domestic laws, and the terms of the Authorization will be in addition and not in derogation of other applicable laws and licenses. In particular, the Applicant will need to conform to the framework for safe and sustainable space operations brought out by Department of Space ("DoS"), ensure that its space activities do not cause any damage to the surface of the earth, any aircraft, other space object or to any property or person and comply with various guidelines including but not limited to the Space Debris Mitigation Guidelines of the Committee on the Peaceful Uses of Outer Space, 2007.
5. Sovereign Claims: The Applicant will need to refrain from asserting any sovereign claims on the whole or portion of outer space, including over resources extracted from space.
6. Material-Adverse Event: The Applicant will need to take measures to mitigate and avoid any damage from a material adverse event and shall report to IN-SPACe in writing about such event within 24 (twenty- four) hours of the occurrence, and also shall report to IN-SPACe within 7(seven) days about the mitigation measures taken.
7. Third-Party Liability: The Applicant will be liable to IN-SPACe and/or GoI for damages as are necessary to remedy losses directly or indirectly arising out of wilful misconduct or negligence resulting in any third-party liability.
8. Financial Penalty: The Applicant desiring to discontinue/terminate/withdraw, partially or fully, the space activity authorized by IN-SPACe anytime during the term of the Authorization will need to provide a prior notice in writing, to IN-SPACe giving reasons for such discontinuation/termination/withdrawal. In the event, the Applicant unilaterally discontinues the provision of services, during the term of Authorization provided by IN-SPACe, without such notice period or for the reasons not justifiable in the sole determination of IN-SPACe, IN-SPACe reserves the right to terminate the Authorization and impose a financial penalty.
9. Indemnification: The Applicant is obligated to indemnify and keep IN-SPACe and GoI, their respective officers and affiliates harmless against any direct or indirect loss, damage or cost (including attorneys' fees incurred for national and international courts representation) incurred in connection with claims, demands, suits, or proceedings arising out of conducting the authorized space activities pursuant to the Authorization.
10. Criminal Complaint: The Applicant is obligated to provide information to IN-SPACe regarding filing of any criminal complaint or case(s), allegations, chargesheet, trials, conviction by courts etc., against the controlling shareholders or promoters or beneficial owners or directors or officers of the Applicant company for various offences including under the Prevention of Corruption Act, 1988 and/or the Prevention of Money Laundering Act, 2002.

B. Power/Rights of IN-SPACe and GoI under NGP

Considering that the GoI is a party to several international space treaties such as The Liability Convention 1972 and is exposed to unlimited liability for third-party damages caused by space activities, irrespective of whether such activities are carried out by it or other non-government entities, extensive powers have been granted to IN-SPACe for regulating the operation of space activities by the Applicant and some of the important rights are detailed below:

1. Amendment or Modification: IN-SPACe reserves the right to amend or modify or repeal the terms of the Authorization in national interests and national security, provided, that IN-SPACe will, not retrospectively amend the terms of Authorization, unless it is, in IN-SPACe's discretion necessary in national interests to do so.
2. Payment of Damages: If on an investigation conducted by IN-SPACe, the Applicant is found guilty of wilful misconduct or neglect resulting in liability, then IN-SPACe reserves the right to direct the Applicant to pay such damages as are necessary to remedy losses, after providing the Applicant an opportunity of being heard.
3. Limitation of Liability: In the event of any termination or revocation of the Authorization by IN-SPACe, neither IN-SPACe nor the GoI shall be liable for any loss of profits, revenue, or any indirect or consequential damages incurred by the Applicant, its contractors, subcontractors, or customers as a result of any termination of the Authorization.
4. Termination for breach of the conditions of Authorization: IN-SPACe reserves the right to withdraw and/or terminate the Authorization after providing prior written notice of 7 (seven) working days in writing to the Applicant, in the event of breach of any of the terms of Authorization or any law, rules, regulations or applicable guidelines issued by IN-SPACe or DoS. If the Applicant is able to rectify the breach, IN-SPACe reserves the right to restore the Authorization.
5. Termination of Authorization during national emergencies or in the interest of national security: During times of conflict or natural disasters or times of emergency and where a criminal complaint or report or chargesheet is filed, and a conviction is made against the Applicant, its controlling shareholders or promoters or beneficial owners or directors, IN-SPACe reserves the right to withdraw the Authorization for conducting space activities or exercise complete control over a space object or space activities, as applicable.
6. Periodic Inspection: IN-SPACe reserves the right to conduct periodic inspections or audits of the Applicant's premises and operations by itself or through its authorized representative to ensure compliance with the terms of the Authorization and relevant laws and regulations.

Coupled with the ISP 2023 and the NGP, the GoI also made amendments to the Foreign Direct Investment ("FDI") policy in the space sector and allowed (i) 100% investment for satellites-manufacturing and operation, satellite data products and ground segment and user segment activities with upto 74% under the automatic route and beyond 74% under the GoI route; (ii) 100% investment in launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft with upto 49% under the automatic route and beyond 49% under the GoI route and (ii) upto 100% under the automatic route for manufacturing of components and systems/sub-systems for satellites, ground segment and user segment activities.

The above polices and regulations indicate GoI's clear intent to encourage a liberalized entry routes of both domestic and international players in the space sector. It is evident that the recent enactments and amendments are intended to create a vibrant space sector ecosystem generating employment, enabling modern technology absorption and augmenting the use of space services. However, it needs to be seen over the next few years if the single window approval process through IN-SPACe would be less cumbersome and time bound, encourage space entrepreneurship, raise more FDI in India and create demand and supply balance for satellite services in India.

Footnotes

1. https://www.inspace.gov.in/sys_attachment.do?sys_id=5d532e37877102503b0f0d060cbb35cf

2. "Applicant" has been defined under the NGP as an Indian entity who has applied to IN-SPACe in the prescribed format seeking Authorization to undertake a space activity as per Indian Space Policy 2023.

3. https://www.isro.gov.in/media_isro/pdf/IndianSpacePolicy2023.pdf

4. "Management and Control" means the persons or entities that exercise control over, and have the power to control and manage the affairs of the entity, and shall include the 'key managerial personnel' as defined under the NGP. 'Control' shall include the right to appoint majority of the directors/ key managerial personnel or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or partnerships agreements or confidence of trust or in any other manner.

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