This artile is written by Venkat Ramaiah Chavali who is pursuing a Diploma in Business Laws for In-House Counsels from LawSikho.

Introduction and Scope

Sea, sky, and space seldom fail to fascinate humans. Space is all that empty vastness beyond earth and sky housing sun, moon, planets, starts and more. Spacetech short for space technology is related to entering and retrieving objects or life forms from space. Technologies that are used in our daily life for forecasting weather using satellites (INSATS), remote sensing, our televisions using satellite transmissions, the GPS we are so much used to these days to navigate and share locations (Ola and Uber wouldn’t have been possible without it) are all offshoots of spacetech so to speak. Of late there is exploration of planets for human habitation. Another interesting development is space tourism. All these involve spacetech. 

It is not difficult to discern from the title of this article that the two key terms are ‘Spacetech startup’ and ‘compliances needed’. Therefore, the focus of this article is on these two aspects while the common and general requirements of startup business structures and legal compliances are either briefly touched upon or not dealt with hereunder.

Space being beyond borders, let us first look at the international treaties and covenants, then the space laws of India, followed by space tech startups the opportunities and concerns. 

International Treaties and Conventions

Space is res communis – an area of territory that is not subject to legal title of any State; to understand refer to the United Nations General Assembly Resolutions 1962 (XVII), 1721 (XVI), and 1884 (XVIII) on outer space. Go through the common heritage principle of mankind. High seas is another example for res communis. 

It does not mean that outer space is a lawless place. If a crime is committed in space it is governed by:

1. Nationality principle, which lets laws of the country to which the person or the carrier (like ship – the concept of floating islands in law) belongs, and 
2. Universality principle, which provides for laws of the countries to prosecute for serious crimes. To wit, piracy. Luckily so far there is no case of piracy in space so far!

But we are not dealing with crime in space here. Our area of interest is compliances needed for a spacetech business startup. 

Treaties & Conventions

Related to space there are five international treaties, these may be referred in short as:

1. The Outer Space Treaty (1967)
2. The Rescue Agreement (1968)
3. The Liability Convention (1972)
4. The Registration Convention (1975), and
5. The Moon Treaty (1979)

All these come under what is christened ‘United Nations Office of Outer Space Affairs’.

Of the five treaties stated earlier, India has ratified four and signed one – the Moon Treaty. For the benefit of those not conversant with international law, ratification indicates acknowledgement – not to be confused as agreement – and signing means an expression of agreement – not agreement per se!

In addition to above, India did ratify two more related treaties. They are:

1. Treaty banning nuclear weapon tests in the atmosphere, outer space and under water.
2. Convention on the prohibition of military or any other hostile use of environmental modification techniques.

The ITU

The above apart the space tech startups essentially need to know about the International Telecommunication Union (ITU). Briefly, ITU is one of the earliest international organizations whose origins date back to the 19th century. Telegraph was the first long distance telecommunication invented in the 1830s by Samuel Morse. During 1849 through 1865 many bilateral agreements attempted to standardize international communications. In 1865 it was felt that a comprehensive agreement was needed to standardize telegraphic equipment and set uniform international operating instructions and rules. The then French Government hosted a conference between 1st to 17th March in which delegates from 20 European states participated. Cut to chase, the Union Internationale des Telecommunications, French for ITU, which is still active:

• Promotes shared global use of radio spectrum.
• Facilitates international cooperation in assigning satellite orbits.
• Assists in developing and coordinating worldwide technical standards.
• Active in:

1. Broadband internet
2. Wireless technologies
3. Next generation networks
4. Aeronautical and maritime navigation
5. Radio astronomy
6. TV broadcasting
7. Satellite based meteorology

• And works to improve telecommunication infrastructure in the developing world. 

Trust given the above there is no need to further elaborate why spacetech startups should know about ITU. 

Space Laws

Space laws are a set of rules and principles aimed at regulating the space beyond the aerial zone and related activities within it. This brings us to the question of how do we define or demark airspace from cosmic space? The question is simple, but eluded agreement on the definition between the nations. After the Soviets sent the Sputnik into the earth’s orbit on October 4, 1957, the United Nations Committee on the Peaceful Use of Outer Space – created in 1958 – is trying to define but yet to agree on an appropriate criterion or criteria to adopt. The boundary is to be clearly defined for the application of space laws, and space laws should precisely define the boundary for it to be effective – which has not happened as there are only disagreements than agreements. A Catch-22 situation.

The solution is similar to the no man’s land between disputing countries, it became a norm that the maximum altitude at which the aircrafts are allowed to fly is 25 Kms from MSL (mean sea level) and spacecrafts cannot orbit below 95kms MSL. The problem being thus circumvented for the being, we have the international treaties based on the guiding principle that outer space, as well as the activities and benefits deriving from it, should be aimed at improving the well-being of all members of the international community and, in general, of humanity, with an emphasis on promoting international cooperation. 

It is interesting to note that the five treaties referred to supra are all made during the late sixties and early seventies, within a span of one decade. In a way the legal boundaries are drawn by these five treaties. The treaties cover partial ban on nuclear testing in outer space, as to who will be responsible if damage occurs to other nations because of the space activities or space objects of a nation to other nations? What kind of a cooperation is to be extended to a nation whose object falls from or lands in another nation? etc. While the ‘polluter pays principle’ of environmental law is not fully adhered to when it comes to space, something close to it is being agreed/worked out.

The Outer Space Treaty – The Magna Carta of Space

The full form of ‘Outer space treaty’ is “Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies” – of 1967. The first paragraph of the Article1 states that the exploration and utilization of outer space must be conducted for the good and in the interest of all countries, regardless of the level of their economic or scientific development. This Treaty is like the Magna Carta of space. It prohibits placing nuclear weapons in the cosmos and limits the use of the moon and other celestial bodies for peaceful purposes. The treaty further states how the outer space must be freely explored and used by all States and how it must never be the object of occupation or exclusive appropriation through claims of sovereignty. It should be emphasized that the Treaty does not prohibit the exercise of activities in space by non-governmental entities but specifies that these require the authorization and continued supervision of the State Party in which the non-governmental entity is located, so that it accounts for full state responsibility regardless of whether the exploration activity is carried out by governmental or non-governmental entities (Article VI).

 All the above is presented to give the big picture, show the forest to the startups that they may know and fit in well into the ecosystem. This is because the major compliances and treaties are to be adhered to by the State level agencies or organizations like NASA of USA and ISRO of India. The startups play the role – at least as of now – of an adjunct or ancillary in the greater scheme of things. Even if a private actor has the acumen and wherewithal to take-up space activities the onus – as we have seen from Article VI of the ‘Outer Space Treaty’ – is on the local government. 

India–Spacetech–Laws

The saga of Indian spacetech started in 1962 with the Indian National Committee for Space Research – present Indian Space Research Organization (ISRO). Under the able guidance of Dr. Vikram Sarabhai it launched the first rocket in 1963, followed by well-known Aryabhata, the domestically designed and built Indian scientific satellite in 1975. India steadily progressed under the aegis of ISRO from making satellites and depending on other nations like Russia (erstwhile USSR) and France to launching its satellites, to commercially undertake satellite launch for other friendly countries. By sending Chandrayaan, the mission to the moon, we discovered for the first time that the moon has water – giants like the USA and USSR sent their men and machines on to the moon but failed to make the discovery! Further, we sent Mangalyaan, the mission to the Mars, with least cost of transport – less cost per kilometer traversed than what the autorickshaw was charging per kilometer then in tier two cities of India. Today we are one of the seven countries that have the capability to design, develop, launch, monitor and commercially exploit the space.

Space has been an exclusive domain of ISRO and some public sector organizations for quite some time. It does not mean there was no private participation in India, but it was limited to providing components and units mostly to the designs provided by ISRO and public sector organizations. 

Laws

While our technological and scientific achievements in the field of space are impressive and laudable, on the legal front we are lagging far behind. India has no space laws. Countries like Germany, Canada, Ukraine, South Africa, Netherlands which have not made any significant mark in spacetech have good space laws to take care of contingencies. It is ironical that India which is indeed a power to reckon with in spacetech does not have laws of its own, apart from ratifying four of the five treaties, signing one and ratifying two related treaties mentioned supra.

Legally speaking ‘ratification’ means the intention of a country to enact the necessary legislation to give effect to the treaty through domestic legislation. Just like signaling does not mean the vehicle shall turn but is only an indication of the driver’s mind which he may subsequently change, so also ratification does not necessarily result in domestic laws!

 It is over half-a-century since India entered space and the only legal regime India has governing the space activities are Articles 51 and 73 of the Constitution of India that respect the International law and treaty obligations in harmony with the Vienna Convention of the ‘Law of Treaties, 1968’. The others being the Satellite Communication Policy of 1997, (the norms, guidelines and procedures were framed in 2000), and the revised Remote Sensing Data Policy of 2011. The objective of this policy is to enable user access to high-resolution data required for developmental activities. The draft Geospatial Information Regulation Bill, 2016 is a tentative step taken by India, which is still pending consideration, not to speak of its limited scope of policing acquisition, publication, and distribution of geospatial information of India. India needs more comprehensive space laws to protect itself and private parties to take care of avoidable international legal consequences.

Business Structure of a Spacetech Startup

There are many articles on business structure of a startup including one by me – “All You Need to Know About the Business Structure of Startups.” Therefore, in this article the focus is on the avenues, opportunities, concerns, and needs of a spacetech startup. Idea being, together with other articles it provides all the enabling information to a spacetech startup to get started with a suitable business structure.

Things A Spacetech Startup Should Know

Luckily, the Indian governments have woken up to the fact that there is a huge opportunity in spacetech and there is an urgent need to involve and work in collaboration with private entities to exploit to continue to be amongst the pioneers, failing which India would get reduced to an also ran. The following corroborate this statement.

IN-SPACe

Union Cabinet approved creation of the Indian National Space Promotion and Authorization Centre (IN-SPACe). Its objectives are:

• to create a level playing ground for private entities and players in using the Indian space infrastructure.
• to welcome and provide the much-needed boost to the private players, handholding where necessary.
• to create a robust and favorable regulatory regime to promote entry of private industries into space activities.
• To extend utilization of India’s space resources and increase the space activities through:

• ISRO infrastructure, 
• Satellite data,
• Scientific and technical resources, and
• other space resources.

NSIL and ACL

New Space India Limited (NSIL) and Antrix Corporation Limited (ACL) are two other organizations created by the Government of India to encourage and accelerate participation and growth of Indian industries.

NSIL is under the administrative control of the Department of Space (DoS) whose objective is to put to commercial use the research and development works so far carried out and being carried out by ISRO as well as other units under DoS.

ACL apart from performing similar functions of NSIL is the marketing wing of ISRO that markets space products, technology transfer and consultancy not just to Indian entrepreneurs and startups but worldwide.

Scope for Startups and Areas Needing Assistance

India is good on hardware and software knowledge. However, because of the capital intensive nature of electronic hardware, India failed to have the necessary infrastructure. The lack of robust laws to attract foreign investment adds to the woes. The result is even today – notwithstanding we are amongst the few countries capable of designing, developing, and putting our satellites in space – are heavily dependent on imports for many electronic components. This is an area where if the government enacts necessary laws and comes up with a single window independent regulator to woo foreign direct investment, a lot can happen. This is no egg and chick situation. If the government builds the nest the Indian entrepreneurs and industry are more than capable of laying the eggs and nurturing the chicks.

Use of Space in Warfare

There is an increasing threat of outer space being used for warfare. Notwithstanding various treaties we cannot remain complacent. It is common knowledge what is happening at the South China Sea – the posturing, bullying, and usurpation of the international waters by the Peoples’ Republic of China. 

To depend purely on ordnance factories or imports is not an answer to defend India in future. There is a need for private participation at various levels, needless to say the big role that startups play. The strength of startups lies in their agility, perseverance, intellect, never-say-die-spirit. Their handicap is capital, legal protections – many a time legal hurdles and red tape. This is an area of opportunity, necessity and concern only the government can and should address proactively. India can ill afford to be a mute spectator when it’s not so friendly neighbors are weaponizing outer space. It must develop its strategic deterrence.

As Vendors

The role already being played by startups to provide components and subsystems to organizations like ISRO is already there and with more and more space missions being in the pipeline, it too is a growing field.

Space Tourism and laws

Another area of interest and future opportunity is space tourism. Space tourism for fun, recreation, business, or education. Elon Musk, well known for his affordable Tesla electric automobiles that is taking the market by storm, is known in spacetech for his SpaceX, which is providing a vehicle to transport things in space and dock with the space station. It is a private enterprise. Space tourism is costly but as stated in Keynesian theory of employment ‘anything that is put on the market place will find a buyer’. It may take some time before the venture breaks even and becomes viable, but surely it is an opportunity, not to be overlooked or underestimated. The space tourism opens many opportunities for startups in the fields of food, clothing, toiletry, to name a few.

The laws applicable to space tourism are different and diversified. They are governed by:

Criterion 1: rationae loci – it is limited in jurisdiction to issues which arise upon the territory of state from where transport is provided (airspace or outer space).

Criterion 2: rationae materiae – also known as subject matter jurisdiction relates to the means of transport, the vehicle and things like that.

Criterion 3: The legal rights benefits a client enjoys and his responsibilities.

As Intellectual Investors

Just like venture capitalists who invest money, in spacetech one can see enormous room for intellectual investment – as distinct from Intellectual Property. It is a concept that needs to be nurtured and fostered. One can see some baby steps being taken in this direction. ISRO is inviting intellectual participation from private parties.

Some Good Auguries

DoS (the Department of Space) appears to be in hyperdrive on ‘space sector reforms’. Recently (in May 2020), it pledged to allow home-grown Indian Companies access to latest lab-equipment of ISRO and other government undertakings.

ISRO to Adopt 100 Atal Tinkering Labs to Promote Education In the Field of Spacetech 

ISRO on Monday the 11th of January 2021 said it will adopt 100 in the field of STEM (Science, Technology, Engineering and Mathematics), space education, and space technology related innovations to students.

Through this collaboration, ISRO will assist in coaching and mentoring students in advanced and cutting-edge technologies of the 21st Century including those related to space. The students are exposed to both theoretical and practical aspects and concepts of electronics, physics, space technology, material sciences and all such branches and fields with focus on harnessing space for human good. Startups can sponsor these students for their requirements.

Kerala’s Space Park – said to be first of its kind

The government of Kerala aims to attract startups and other stakeholders in the space technology arena across the world by giving them insights into the Indian spacetech ecosystem.

The Kerala government to project its state as a major manufacturing hub for space-related technology, is setting up a dedicated facility – taking advantage of ISRO’s Vikram Sarabhai Space Centre and (Thumba) rocket launch station at Thiruvananthapuram.

The Space Park will have two crucial sectors. Namely:

1. The Nano Space Park

It is assembly and hardware centric. Its focus is on small and medium businesses and startups, which are component and subcomponent developers and manufacturers. Being a Nano space park, large assembly and manufacturing units are out of the question. It is for small manufacturing units with high-tech components of interest to the space sector. 

2. Space Technology Application Development Ecosystem (STADE)

It works around the application development segment. Its aim is to understand, generate and develop downstream markets.

The Park has a three-layered support system for startups:

1. Critical infrastructure support to manage their operations.
2. Infrastructure support in terms of:

1. Test facilities.
2. Data computation.
3. Analysis for space sector business.

iii. Mentors and experts to support startups and small enterprises in the space sector.

The large number of scientists that superannuate every year who are interested to guide and nurture the young talent, will be deployed.

Some Indian Startups

Do you know there are entrepreneurs across India building rockets to launch satellites?

Let me name some:

• Skyroot Aerospace, Hyderabad.

It is the first private company of India to successfully design, develop and test a fully solid-fueled rocket stage (named Kalam-5) in December 2020. This technology will be used for their maiden rocket Vikram-1, being manufactured, and targeted to be launched in December 2021 with the assistance of ISRO.

• Bellatrix Aerospace, based in IISc Bangalore.
• Agnikula Cosmos, based at IIT Chennai.

Briefly, Agnikul is founded by two youngsters Moin SPM and Srinath Ravichandran. They are inspired by the successful launches of ISRO. Agnikul is working to make rocket science easy to understand and bring it within the realm of everyone’s reach. The startup Agnikul vouches to put micro and nano satellites (less than 500kg) in low earth orbits in just two weeks. Know that satellite/rocket launching is an industry that made USD 277.4 billion in revenue last year, worldwide.

As could be seen, they are knowledge and capital intensive. ISRO, NSIL and ACL can play a big role in making these startups a success with their experience in the field fortified by the institutes of technology and science. United we can reach beyond the skies! Rocket launching is one aspect, there are others too. Here is a sector wise breakup of space tech startups in India.

Concerns

Let us take a quick and brief look at the concerns of space tech and startups.

The Liability for Damages

At the international level, Liability Convention 1972, Article 2 puts absolute liability on launching State for the damages caused by its space object(s) on the surface of the earth or to the aircraft in flight and would have to pay compensation for the same. It is an ambiguous clause for it provides no mechanism of determining the quantum of compensation.

Nearer home at the domestic level, Section 12 of the draft Space Activities Bill, 2017 imposes an obligation on the licensee – for undertaking commercial space activities – to indemnify the Central Government from any third-party claim related to any loss or damage incurred by a space vehicle or space activity. It simply states the quantum of indemnity is left to the discretion of the Central Government to be determined. With no cap on the amount that can be slapped as damages, it is a bugbear that keeps away domestic and foreign investors.

Section 13 of the Space Activities Bill, 2017 provides for punishment for undertaking commercial space activities without license or proper authorization with a fine of Indian Rupees One Crore (INR Ten million) or imprisonment or both. WoW! Which investor would come forward with such huge terrorizing punitive measures? Hopefully during the readings of the Bill prior passing by the legislature these aspects would be viewed and amended to mellow to the levels of reasonable deterrents and not scare away the entrepreneur and investors alike.

Space Debris

Space debris is made of natural (meteoroid) matter and the junk that man has left in the space intended or not. They do not degrade fast and keep orbiting in space increasing traffic and ever-increasing probability of disastrous collisions with orbiting satellites or during the launch or reentry of various space vehicles into the space orbits. Fortunately, or unfortunately, there is no international treaty or convention to deal with imposition of liability. NASA issued guidelines on “How to deal with space debris” which were adopted by the UN General Assembly and the Committee on the Peaceful Use of Outer Space (COPUOS). These, please understand, are only guidelines.

You may be interested to know that India too contributed its share of junk to the space!

Japan is now working on building satellites with wood, a biodegradable material to reduce or from adding to the space debris. The question is whether wood would degrade or not in space? We do know of vacuum sealing for preserving things, don’t we! Well, at least one thing is certain, even if these Japanese wooden satellites collide with other space objects they crumble and disintegrate than dent and damage like other satellites being built with other materials do. The other advantage is when it is spent and dodders from its orbit and re-enters earth, then on reentry it burns out and turns to ash without lodging and piling on earth’s habitats.

The Future After Covid-19 Disruption

The year 2019 was about Chandrayaan-2 and the movie that brought Mars and ISRO into our homes, Mangalyaan. In the year 2020, Covid-19 dampened and disrupted all expectations but failed to douse the soaring spirits of space exploration. The government had time to think and opened the space sector to private players. Refer to material covered by supra under the headings IN-SPACe, NSIL, ACL, Atal Tinkering Labs and Kerala Space Park, to name a few in support of the statement.

Summary and Conclusion

• Spacetech or space technology is an international arena, being dominated by State agencies, but in the last two to three decades it has been opened to private entities.
• While there are some good intentioned international treaties and conventions, the adherence is a moot point. The ‘South China Sea’ skirmishes are a case in point. 
• It is heartening that India is among the pioneers in space technology and harnessing it for human good at home and at large.
• India is ahead in technology, behind in the electronic hardware industry and has virtually no legal presence. The recent steps taken by the government give hope that India is moving quickly to fill the gaps and maintain the overall lead.
• In India, a lot is done on the technology front and a lot more needs to be done in attracting and involving private parties and investors as well as in the fields of law, entrepreneurial support and the like. 

The spacetech is both money and intellectual capital intensive. While the expenses are a given the returns are at best anticipated and at worst illusory. To infuse confidence and bring investors forward a robust regulatory system armed with space laws is crucial. 

Willy-nilly space has become central to 21st century warfare. It all started way back towards the end of the twentieth century with American ‘star wars’ program. An Indian space law would serve – by removing legal obstacles that jealous nations can impose – the growth of space tech both by government institutions and private players. Domestic laws enable Indian intelligentsia to work on a military umbrella in space to protect the country from enemy countries that are equipped with nuclear weapons and ballistic missiles. India does not lack in technology or brains only the political will, to make and enforce laws. 

The need of the hour is to have our own comprehensive space laws, in consonance with international conventions and treaties in so far as they are not repugnant to Indian context and greater human good. 

References

[1] The Conversation – Australian Edition

[2] International Telecommunication Union (www.itu.int)

[3] ISPI (Italian Society for International Political Studies) online

[4] Article by Senjuti Mallick in Open Page The Hindu

[5] Latest Laws .com

[6] ELON MUSK Tesla, SpaceX, and the Quest for a Fantastic Future – a book written by
      Ashlee Vance, HarperCollins E-Books

[7] SPACE-TECH article in yourstory.com

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