History

Why Haven’t ISRO and the US Signed Their Commercial Space Launch Agreement Yet?

ISRO will have to take a call about whether it still thinks of itself as vulnerable to getting “priced out” of the world market for commercial satellite launches or is now mature enough to play hardball with the US.

The PSLV takes off on its 24th mission in April 2014 to launch the IRNSS 1B satellite. Source: ISRO

The PSLV takes off on its 24th mission in April 2014 to launch the IRNSS 1B satellite. Source: ISRO

Indians, regardless of politics or ideology, have a high opinion of the Indian Space Research Organisation (ISRO). Conversations centred on it usually retain a positive arc, sometimes even verging on the exaggerated in lay circles – in part because the organisation’s stunted PR policies haven’t given the people much to go by, in part because of pride. Then again, the numbers by themselves are impressive: Since 1993, there have been 32 successful PSLV launches with over 90 instruments sent into space; ISRO has sent probes to observe the Moon and Mars up close; launched a multi-wavelength space-probe; started work on a human spaceflight program; developed two active launch vehicles with two others still in the works; and it is continuing its work on cryogenic and scramjet engines.

The case of the cryogenic engine is particularly interesting and, as it happens, relevant to a certain agreement that India and the US haven’t been able to sign for more than a decade now. These details and more were revealed when a clutch of diplomatic cables containing the transcript of conversations between officials from the Government of India, ISRO, the US Trade Representative (USTR) and other federal agencies surfaced on Wikileaks in the week of May 16. One of them delineates some concerns the Americans had about how the Indian public regarded US attempts to stall the transfer of cryogenic engines from the erstwhile USSR to India, and the complications that were born as a result.

In 1986, ISRO initiated the development of a one-tonne cryogenic engine for use on its planned Geosynchronous Satellite Launch Vehicle (GSLV). Two years later, an American company offered to sell RL-10 cryogenic engines (used onboard the Atlas-Centaur Launch Vehicle) to ISRO but the offer was turned down because the cost was too high ($800 million) and an offer to give us the knowhow to make the engines was subject to approval by the US government, which wasn’t assured. Next, Arianespace, a French company, offered to sell two of its HM7 cryogenic engines along with the knowhow for $1,200 million. This offer was also rejected. Then, around 1989, a Soviet company named Glavkosmos offered to sell two cryogenic engines, transfer the knowhow as well as train some ISRO personnel – all for Rs.230 crore ($132 million at the time). This offer was taken up.

However, 15 months later, the US government demanded that the deal be called off because it allegedly violated some terms of the Missile Technology Control Regime, a multilateral export control regime that Washington and Moscow are both part of. As U.R. Rao, former chairman of ISRO, writes in his book India’s Rise as a Space Power, “While the US did not object to the agreement with Glavkosmos at the time of signing, the rapid progress made by ISRO in launch vehicle technology was probably the primary cause which triggered [the delayed reaction 15 months later].” Officials on the Indian side were annoyed by the threat because solid- and liquid-fuel motors were preferred for use in rockets – not the hard-to-operate cryogenic engines – and because India had already indigenously developed such rockets (a concern that would be revived later). Nonetheless, after it became clear that the deal between Glavkosmos and ISRO wouldn’t be called off, the US imposed a two-year sanction from 1992 that voided all contracts between ISRO and the US and the transfer of any goods or services between them.

Remembering the cryogenic engines affair

This episode raised its ugly head once again in 2006, when India and the US – which had just issued a landmark statement on nuclear cooperation a year earlier – agreed on the final text of the Technical Safeguards Agreement (TSA) they would sign three years later. The TSA would “facilitate the launch of US satellite components on Indian space launch vehicles”. At this time, negotiations were also on for the Commercial Space Launch Agreement (CSLA), which would allow the launch of American commercial satellites onboard Indian launch vehicles. The terms of the CSLA were derived from the Next Steps in Strategic Partnership (NSSP), a bilateral dialogue that began during the Vajpayee government and defined a series of “quid-pro-quos” between the two countries that eventually led to the 2005 civilian nuclear deal. A new and niggling issue that crept in was that the US government was attempting to include satellite services in the CSLA – a move the Indian government was opposed to because it amounted to shifting the “carefully negotiated” NSSP goalposts.

As negotiations proceeded, the cable, declassified by the then US ambassador David Mulford, reads:

“Since the inception of the NSSP, reactionary holdouts within the Indian space bureaucracy and in the media and policy community have savaged the concept of greater ties with the US, pointing to the progress that India’s indigenous programs made without assistance from the West. The legacy of bitterness mingled with pride at US sanctions continues in the present debate, with commentators frequently referring to US actions to block the sale of Russian cryogenic engines in the 1990s as proof that American interest continues to focus on hobbling and/or displacing India’s indigenous launch and satellite capabilities.”

The timing of the Glavkosmos offer, and the American intervention to block it, is important when determining how much the indigenous development of the cryogenic upper stage in the 2000s meant to India. After ISRO had turned down Arianespace’s HM7 engines offer, it had decided to develop a cryogenic engine from scratch by itself over eight years. As a result, the GSLV program would’ve been set back by at least that much. And it was this setback that Glavkosmos helped avoid (allowing the GSLV development programme to commence in 1990). Then again, with the more-US-friendly Boris Yeltsin having succeeded Mikhail Gorbachev in 1991, Glavkosmos was pressurised from the new Russian government to renegotiate its ISRO deal. In December 1993, it was agreed that Glavkosmos would provide four operational cryogenic engines and two mockups at the same cost (Rs.230 crore), with three more for $9 million, but without any more technology transfer.

The result was that ISRO had to fabricate its own cryogenic engines (with an initial investment of Rs.280 crore in 1993) with little knowledge of the challenges and solutions involved. The first successful test flight happened in January 2014 on board the GSLV-D5 mission.

So a part of what we are proud of about ISRO today, and repeatedly celebrate, is rooted in an act whose memories were potential retardants for a lucrative Indo-US space deal. Moreover, they would also entrench any concessions made on the Indian side in a language that was skeptical of the Americans by default. As the US cable notes:

“While proponents point to ISRO’s pragmatism and scientific openness (a point we endorse), opponents of the [123] nuclear deal have accused ISRO of selling out India’s domestic prowess in space launch vehicles and satellite construction in order to serve the political goal of closer ties with the US. They compare ISRO’s “caving to political pressure” unfavorably with … Anil Kakodkar’s public statements drawing a red line on what India’s nuclear establishment would not accept under hypothetical civil-military nuclear separation plans.”

How do we square this ‘problematic recall’ with, as the same cable also quotes, former ISRO chairman G. Madhavan Nair saying a deal with the US would be “central to India’s international outreach”? Evidently, agreements like the TSA and CSLA signal a reversal of priorities for the US government – away from the insecurities motivated by Cold-War circumstances and toward capitalising on India’s rising prominence in the Space Age. In the same vein, further considering what else could be holding back the CSLA throws more light on what another government sees as being problematic about ISRO.

Seeing the need for the CSLA

The drafting of the CSLA was motivated by an uptick in collaborations between Indian and American entities in areas of strategic interest. The scope of these collaborations was determined by the NSSP, which laid the groundwork for the civilian nuclear deal. While the TSA would allow for American officials to inspect the integration of noncommercial American payloads with ISRO rockets ahead of launch, to prevent their misuse or misappropriation, it wouldn’t contain the checks necessary to launch commercial American payloads with ISRO rockets. Enter CSLA – and by 2006, the Americans had started to bargain for the inclusion of satellite services in it. (Note: US communications satellites are excluded from the CSLA because their use requires separate clearances from the State Department.)

However, the government of India wasn’t okay with the inclusion of satellite services in the CSLA because ISRO simply wasn’t ready for it and also because all other CSLAs that the US had signed didn’t include satellite services. The way S. Jaishankar – who was the MEA joint secretary dealing with North America at the time – put it: “As a market economy, India is entitled to an unencumbered CSLA with the US”. This, presumably, was also an allusion to the fact that Indian agencies were not being subsidised by their government in order to undercut international competitors.

A cable tracking the negotiations in 2009 noted that:

“ISRO was keen to be able to launch U.S. commercial satellites, but expected its nascent system to be afforded flexibility with respect to the market principles outlined in the CSLA. ISRO opposed language in the draft CSLA text on distorting competition, transparency, and improper business practices, but agreed to propose some alternate wording after Bliss made clear that the USG would not allow commercial satellites to be licensed in the same way as non-commercial satellites … indicating that commercial satellites licenses would either be allowed through the completion of a CSLA or after a substantial period of time has passed to allow the USG to evaluate ISRO’s pricing practices and determine that they do not create market distortions.”

ISRO officials present at the discussion table on that day asked if the wording meant the US government was alleging that ISRO was unfairly undercutting prices (when it wasn’t), and if the CSLA was being drafted as a separate agreement from the TSA because it would allow the US government to include language that explicitly prevented the Indian government from subsidising PSLV launches. USTR officials countered that such language was used across all CSLAs and that it had nothing to do with how ISRO operated. (Interestingly, 2009 was also the year when SpaceX ditched its Falcon 1 rocket in favour of the bigger Falcon 9, opening up a gap in the market for a cheaper launcher – such as the PSLV.)

Nonetheless, the underlying suspicion persists to this day. In September 2015, the PSLV C-30 mission launched ASTROSAT and six foreign satellites – including four cubesats belonging to an American company named Spire Global. In February 2016, US Ambassador Richard Verma recalled the feat in a speech he delivered at a conference in New Delhi; the next day, the Federal Aviation Administration reiterated its stance that commercial satellites shouldn’t be launched aboard ISRO rockets until India had signed the CSLA. In response to this bipolar behaviour, one US official told Space News, “On the one hand, you have the policy, which no agency wants to take responsibility for but which remains the policy. On the other, government agencies are practically falling over themselves to grant waivers.” Then, in April, private spaceflight companies in the US called for a ban on using the PSLV for launching commercial satellites because they suspected the Indian government was subsidising launches.

A fork in the path

India also did not understand the need for the CSLA in the first place because any security issues would be resolved according to the terms of the TSA (signed in 2009). It wanted to be treated the way Japan or the European Union were: by being allowed to launch American satellites without the need for an agreement to do so. In fact, at the time of signing its agreement with Japan, Japan did not allow any private spaceflight entities to operate, and first considered legislation to that end for the first time in 2015. On both these counts, the USTR had argued that its agreement with India was much less proscriptive than the agreements it had struck with Russia and Ukraine, and that its need for an agreement at all was motivated by the need to specify ‘proper’ pricing practices given India’s space launches sector was ruled by a single parastatal organisation (ISRO) as well as to ensure that knowhow transferred to ISRO wouldn’t find its way to military use.

The first news of any organisation other than ISRO being allowed to launch rockets to space from within India also only emerged earlier this year, with incumbent chairman A.S. Kiran Kumar saying he hoped PSLV operations could be privatised – through an industrial consortium in which its commercial arm, Antrix Corporation, would have a part – by 2020 so the rockets could be used on at least 18 missions every year. The move could ease the way to a CSLA. However, no word has emerged on whether the prices of launches will be set to market rates in the US or if ISRO is considering an absolute firewall between its civilian and military programmes. Recently, a group of universities developed the IRNSS (later NAVIC), India’s own satellite navigation system, alongside ISRO, ostensibly for reducing the Indian armed forces’ dependence on the American GPS system; before that was the GSAT-6 mission in August 2015.

If it somehow becomes the case that ISRO doesn’t ever accede to the CSLA, then USTR doubts over its pricing practices will intensify and any commercial use of the Indian agency’s low-cost launchers by American firms could become stymied by the need for evermore clearances. At the same time, signing up to the CSLA will mean the imposition of some limits on what PSLV launches (with small, commercial American payloads) can be priced at. This may rob ISRO of its ability to use flexible pricing as a way of creating space for what is after all a “nascent” entity in global terms, besides becoming another instance of the US bullying a smaller player into working on its terms. However, either course means that ISRO will have to take a call about whether it still thinks of itself as vulnerable to getting “priced out” of the world market for commercial satellite launches or is now mature enough to play hardball with the US.

Special thanks to Prateep Basu.

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  • onetwothree

    Vasudevan, Please send copy of this article personally to PMO and ISRO. Space market is the next frontier where ISRO can help India to be independent from US quasi imperialism in the future. This is as important as net neutrality if not more. It conserns every indian’s life directly or indirectly. Only way to be competitive in this field is by a massive government / private investement and a healthy local competition between parts makers in India.

    Thank you for very interesting article. Fine piece of journalism!

  • ProgressForIndia

    When faced with this type of strong-arming from the US, what India needs to do is to form its own rival grouping with other countries who stand to benefit from cheaper Indian launch prices. That grouping could develop satellite technologies of their own, which are not subject to US approval/clearances/licensing. At that point, whoever wants to benefit from the services of this rival satellite grouping will be able to ditch the higher-priced American companies. For this, India needs to boost its electronics industry and partner with other countries outside America’s orbit who have such strategic technologies. Russian semiconductor industry is based on diamond electronics, which are supposed to be superior to silicon, especially for space applications. India should find ways to challenge the market dominance of US satellite services companies by competing at the level of service providers.

  • ProgressForIndia

    Read about a small new private Indian company which is offering small payload launches:

    http://bellatrixaerospace.com/
    https://www.facebook.com/bellatrixaerospace/

    Since they aren’t ISRO, perhaps they have a better chance of being certified as a non-subsidized market competitor.

  • Plebian

    “a group of universities developed the IRNSS(later NAVIC), India’s own satellite navigation system, alongside ISRO”

    What universities were involved in IRNSS development?