Friday, May 24, 2024

US Loosens Satellite Export Restrictions, Paving The Way For Collaboration With India In The Global Space Industry

By Staff Correspondent

The United States (US) has recently undertaken a significant shift in its satellite export approval process, signalling a move towards further liberalisation and a merit-based approach to foster the growth of the US space industry. In the past, the approval process for satellite exports was entrenched in the ‘presumption of denial’ policy, particularly if the products were expected to be flown on a foreign launch vehicle that the US government discouraged. However, the policy landscape has evolved, and now license requests are evaluated on a case-by-case basis, prioritising a merit-based approach to propel the US space industry forward.

Notably, one foreign launch vehicle that has faced challenges in obtaining approval from US authorities is India’s Polar Satellite Launch Vehicle (PSLV). Despite waivers being granted to satellite developers, and small satellite companies, the application process for a waiver has increased the compliance burden and introduced unpredictability in executing business plans.

Furthermore, the waiver is a one-time approval, necessitating companies to reapply for a waiver even if their satellites were launched on the PSLV previously. Such waivers were granted before notable PSLV launches, such as the C37 mission that orbited 96 co-passenger satellites belonging to the US.

The US government has expressed concerns that the Indian government is subsidising the launch cost of the PSLV to gain a competitive advantage in the international launch vehicle market, particularly in comparison to US launch vehicles. To ensure that launch prices offered by other countries do not substantially deviate from American launch costs, the US has entered into commercial space launch agreements with Russia, China, and Ukraine.

Despite multiple negotiations, India and the US have yet to sign such an agreement. Interviews with unnamed PSLV customers in the media have revealed that the US government intends to audit the Indian Space Research Organisation (ISRO) during this process, a proposition that the Indian government may not accept.

Notably, waivers are routinely granted for US companies and foreign manufacturers utilising American components in their satellites. The waiver process was established during the culmination of the Cold War, which significantly influenced the American perspective on satellites, satellite components, and launch vehicles.

As a result, the authority to issue export permits has oscillated between the Departments of Commerce (from a trade perspective) and the State (from a security perspective). The White House and the US Congress have also intervened in this debate by imposing export restrictions through domestic laws. However, these restrictions have been moderated by the waiver authority granted to the US President to uphold American economic and security interests in specific situations. For example, President Bush Sr. restricted the export of satellite components to China but allowed the launch of two satellites onboard Chinese launch vehicles, considering the peaceful nature of these projects.

Nevertheless, in the late 1990s, the Cox Commission concluded that investigations into the failure of Chinese launch vehicles carrying American satellites had inadvertently transferred technical know-how, potentially enabling China to enhance its ballistic missile designs. Additionally, the Missile Technology Control Regime (MTCR) imposed sanctions on ISRO in the early 1990s for importing cryogenic engine technology from Russia, a technology that the US believed would enhance India’s missile development program.

These developments led to the drafting the Strom Thurmond National Defense Authorization Act for the fiscal year 1999. This Act (Section 1513) transferred satellites and related items from the Commerce Control List to the Munitions List, resulting in tightened export controls.

India’s Emergence As A Competitive Player In The Global Space Industry

Recent years have witnessed significant policy changes in the United States regarding the space industry, driven by the growing demand for small satellite launches and the need for cost-effective solutions. China’s dominance in the communications satellite launch market in the Global South and the marketing of ITAR-free satellites (International Traffic in Arms Regulations) has also prompted a reevaluation of US policy in this area. As a result, the Obama Administration made a noteworthy policy shift by removing ITAR restrictions on satellites and satellite components and relisting them under the Commerce Control List through the National Defense Authorization Act for Fiscal Year 2013.

A pivotal factor influencing this policy change has been the reinterpretation of the provisions of the MTCR. India’s full membership in the MTCR in 2016 has strengthened its case for obtaining waivers for its Polar Satellite Launch Vehicle (PSLV). Furthermore, India has undergone significant reforms in its space program, consolidating responsibilities for research and development (ISRO), satellite production and launch (NSIL), and industry promotion (IN-SPACe) under a single framework. This restructuring is expected to facilitate increased private industry participation, from suppliers to the government, in the complete launch process.

In a noteworthy development in September 2022, a consortium of leading Indian companies, Larsen & Toubro (L&T) and Hindustan Aeronautics Limited (HAL), was awarded a contract to produce five PSLV rockets. Additionally, the Small Satellite Launch Vehicle (SSLV), designed to cater to the needs of small satellite businesses, is also expected to be produced by the industry. These reforms aim to position India’s launch vehicles to compete fairly in the global market. Furthermore, India has recently approved the Space Policy 2023, which seeks to consolidate the implemented reforms and further enhance industry participation in the space sector.

Space cooperation has long been a significant foundation for the strategic relations between India and the United States. Industrial and commercial cooperation in space is expected to add further value to this relationship, particularly in light of the ongoing Ukraine War. One recent example of this cooperation is the shift of two missions by OneWeb, a satellite broadband company, to India’s GSLV Mk III launch vehicle following the cancellation of a contract with Russia’s Soyuz launch vehicle. A synchronised launch manifest that considers the interests of the US and India could be a worthwhile project, particularly given the growing competition in the Low Earth Orbit constellation market.

India’s role in the global space industry has been steadily growing, driven by recent policy changes that have relaxed restrictions on satellite launches and facilitated increased private industry participation. These reforms, along with the country’s membership in the MTCR and restructuring of its space program, are expected to position India as a competitive player in the global space market. Continued cooperation between India and the United States in the space domain is likely to further strengthen their strategic relations and contribute to the growth of the global space industry.

Most Popular