India as space industry hub
- The space race is on again, but this time, private players are on the power field to take the next leap for mankind and democratize space usage to build commercial value.
- This has huge implications for original equipment manufacturers (OEMs) in the space sector in India and is a promising venture for global investors.
- The Government of India created a new organization known as IN space (Indian National Space Promotion and Authorization Centre) which is a “single window nodal agency” established to boost the commercialization of Indian space activities.
- A supplement to the Indian Space Research Organization (ISRO), the agency promotes the entry of the Non-Government Private Entities (NGPEs) in the Indian space sector.
- The agency will also felicitate a swift on-boarding of private players in the sector through encouraging policies in a friendly regulatory environment and by creating synergies through already existing necessary facilities, the report says.
- Today, the space economy is a $440 billion global sector, with India having less than 2% share in the sector.
- This is despite the fact that India is a leading space-faring country with end-to-end capabilities to make satellites, develop augmented launch vehicles and deploy inter-planetary missions
- The extensive brain drain in India, which has increased by 85% since 2005. This can be linked to the bottlenecks in policies which create hindrances for private space ventures and founders to attract investors, making it virtually non-feasible to operate in India.
- Currently, a report on a leading news portal says: the reason for the lack of independent private participation in space includes the absence of a framework to provide transparency and clarity in laws.
- “With the technicalities involved in the space business, timelines on licensing, issuance of authorization and continuous supervision mechanism need to be defined into phases.
- Another crucial aspect of space law is insurance and indemnification clarity, particularly about who or which entity undertakes the liability in case of a mishap.
- To create value, Indian space private companies need to generate their intellectual property for an independent product or service.
- Mature space agencies such as the National Aeronautics and Space Administration (NASA) of the United States, China’s China National Space Administration (CNSA), and Russia’s Roscommon (Roscosmos State Corporation for Space Activities) seek support from private players such as Boeing, SpaceX and Blue Origin for complex operations beyond manufacturing support, such as sending crew and supplies to the International Space Station.
- These companies have revolutionized the space sector by reducing costs and turnaround time with innovation and advanced technology.
- India can now evolve as a space start-up hub for the world.
- The sector is in the embryonic stage where the possibilities are limitless with a scope to build a feasible business model.
- Already 350 plus start-ups such as Agni Kul Cosmos, Skyroot Technologies, Dhruva Space and Pixel have established firm grounds for home-grown technologies with a practical unit of economics.
Regulation of cryptocurrency
- RBI issued its first advisory cautioning holders of virtual currencies about the potential financial and security risks, and two years after drafting a Bill to ban cryptocurrencies, the Government is set to introduce legislation that would, if passed, officially proscribe such currencies.
- Its concerns appear to be the risks associated with cryptocurrencies, including their potential use for money-laundering and financing of illegal activities.
- The risks investors and consumers face in dealing with these so called currencies, given that they are neither ‘a store of value nor are they a medium of exchange’, and the ostensible threat they pose to financial stability, are also key factors.
- There has been an exponential jump in investment in virtual currencies, especially after the Supreme Court last year struck down an RBI notification barring financial entities from facilitating customer transactions related to virtual currencies.
- Industry estimates now peg cryptocurrency holdings in India at about ₹40,000 crore, held by about 15 million investors, and advertising trends show an upsurge in ads promoting brands associated with investment in virtual currencies.
- An Inter-Ministerial Committee set up to study the issues related to virtual currencies first proposed the ban in 2019 is beyond doubt.
- From the emphatic assertion in that panel’s report that “no country across the world treats virtual currencies as legal tender” to a situation where earlier this year El Salvador admittedly a small and heavily indebted nation officially declared ‘bitcoin’ as legal tender, much has changed in the adoption of private virtual currencies worldwide.
- The pandemic has accentuated the global embrace of all things digital and investment in the technologies enabling cryptocurrencies including blockchain, appear to be no different.
- Canada, Japan and Thailand permit the use of virtual currencies as a payment method, with some jurisdictions regulating them as a digital asset, and others as a commodity.
- Canada and the U.S. closely monitor virtual currency activity to ensure they do not run afoul of laws on financial crimes, with the former also earning tax revenue on transactions.
- All things given, India should eschew the temptation to join China in proscribing virtual currencies and instead aim to tightly regulate their trading through monitored exchanges and earn revenue.
Boosting green hydrogen in India
- Prime Minister recently announced that India would aim for net-zero carbon emissions by 2070.
- The announcement was given credence by the country’s solar achievements since 2015.
- India is the only major economy whose policies and actions are on track to limit global average temperature rise below 2°C above pre-industrial levels, as envisioned in the Paris Agreement.
- As of now, 75% of India’s energy demand is met by coal and oil, including imports.
- This is expected to increase.
- Therefore, the synergy between renewable energy and green hydrogen must be tapped to tackle the dependence on fossil fuel and take greater advantage of India’s solar capacity.
- Hydrogen green hydrogen, in particular is a crucial weapon in India’s arsenal to fight climate change as it improves the long-term energy storage capabilities of renewable energy.
- The simplest element in the periodic table is also the most promising solution to decarbonize sectors like cement, steel, and refineries.
- “Hydrogen can provide the lowest-cost decarbonization solution for over a fifth of final energy demand by mid-century contributing a cumulated reduction of 80Gt of CO2 and is thus an essential solution to reach the 1.5°C climate scenario,”
- A low-carbon source of energy is required to generate hydrogen through electrolysis the splitting of a water molecule into hydrogen and oxygen.
- The hydrogen produced is coded with a colour, depending on the method of its production.
- While hydrogen generated through renewable energy sources is green, it is blue when the carbon generated from the process is captured and stored without dispersing it in the atmosphere.
- When the carbon is not captured, the generated hydrogen is labelled grey.
- Nearly 70% of the investments required to produce green hydrogen through electrolysis goes into generating renewable energy.
- With India’s solar capacity increasing nearly 3,000 times in less than a decade, the cost of solar energy has reached a low of ₹2 per kWh.
- A few key sectors with low transition costs, such as refineries, fertilizers and natural gas, should be mandated to use hydrogen to bring down costs as part of near-term goals.
- New demand from steel, cement and road mobility should be mandated as part of medium-term goals.
- Heavy-duty vehicles should receive State and Central incentives.
- Shipping, aviation, energy storage and solutions towards power intermittency should be mandated to use green hydrogen in the long run.
- Enforcing time-bound mid- and long-term policies would inspire the private sector to invest more in green hydrogen and give the boost it requires in its nascent stages.
- India’s current grey hydrogen production is six million tonnes per annum, which is around 8.5% of global annual production.
- India should replace this with green hydrogen and reduce dependence on imported ammonia.
- It should aim to produce 4-6 million tonnes of green hydrogen per annum by the end of the decade and export at least 2 million tonnes per annum.