India’s Space Law: The Missing Piece in its Space Journey

23/08/2025

Why in the News?

India celebrates its second National Space Day on August 23, marking the Chandrayaan-3 soft-landing (August 23, 2023) and a new phase of ambitious missions like Gaganyaan, future Chandrayaan follow-ons, and the proposed Bharat Antariksh Station.
Despite the scientific momentum, India’s legal architecture lags: there is still no comprehensive Space Activities Act to translate international obligations into clear domestic rules for government and private actors.
With rapid commercialisation of space and the rise of Indian startups, a modern, predictable legal framework is now essential to manage risk, attract investment, and ensure responsible operations.

Key Highlights

What does the Outer Space Treaty of 1967 stipulate?
1. Province of all humankind and non-appropriation: Outer space, including the Moon and other celestial bodies, cannot be claimed by sovereignty, use, occupation, or any other means.
2. Peaceful purposes and due regard: Activities must be for peaceful purposes, with due regard to the interests of other states and avoidance of harmful contamination.
3. State responsibility and authorisation: States are internationally responsible for national activities in outer space, whether conducted by governmental or non-governmental entities; they must authorise and continually supervise private activities.
4. Other treaties connected with the Outer Space Treaty: The Rescue Agreement (1968) requires helping astronauts in distress; the Liability Convention (1972) makes countries liable for damage caused by their space objects; and the Registration Convention (1975) requires states to maintain records of space objects launched. Together, they create a complete framework of responsibilities for states.
Is the treaty self-executing? Why must countries enact national space legislation?
1. The United Nations treaties on outer space are not self-executing; they lay down principles but do not automatically apply within domestic legal systems.
2. National laws are needed to make these principles enforceable within countries and to create specific rules for licensing, penalties, and responsibilities.
3. Without national legislation, regulators cannot enforce safety standards, supervise private operators, or assign liability in case of accidents.
4. Predictability for investors: Investors require legal clarity on issues such as licensing, dispute resolution, and intellectual property rights, which only a national law can guarantee.
5. Avoiding international disputes: If a private company causes damage in space, the country will be held responsible internationally. Having a national law helps distribute responsibility fairly between the government and the private company.
6. Harmonisation with global practice: Most major spacefaring nations like the United States, Japan, and Luxembourg already have such laws, allowing them to balance innovation with accountability.
Why India needs a national space law now
1. Legal clarity and predictability: A statute would convert policy intent into enforceable rights, duties, and timelines for licensing, spectrum/data use, liability, and penalties, improving ease of doing business.
2. Compliance with international law: It would formalise authorisation and supervision, registration of space objects, liability sharing, and debris mitigation consistent with United Nations guidelines.
3. Safety and sustainability: Codifying accident investigation, space debris mitigation, end-of-life disposal, and collision-avoidance responsibilities reduces systemic risks in crowded orbits.
4. Capital access and insurance: Clear liability caps, minimum insurance requirements, and government backstops (where appropriate) unlock domestic and foreign financing, especially for startups.
What has been India’s approach so far?
1. Step-by-step regulatory progress: India has not rushed into legislation but instead created smaller frameworks to prepare the ground.
2. The Indian Space Policy, 2023 defines the vision, roles of organisations like Indian Space Research Organisation (ISRO), Indian National Space Promotion and Authorisation Centre (IN-SPACe), and NewSpace India Limited (NSIL), while also encouraging private players to participate in all aspects of space activities.
3. The IN-SPACe Norms, Guidelines and Procedures (NGP) explain the detailed process for authorisation of space activities like satellite launches, ground stations, or satellite communication services. This gives companies a structured way to seek approvals.
4. A Catalogue of Indian Standards for Space Industry is being developed to ensure that safety and quality benchmarks are met in every project.
5. Foreign Direct Investment (FDI) liberalisation (2024): The government now allows 100% FDI under the automatic route in satellite components, ground equipment, and user segments. Up to 74% is allowed in satellite manufacturing and operations. Launch vehicles, being sensitive technology, have lower automatic FDI limits.
6. The Telecommunications Act, 2023 also impacts the space sector by creating new rules for spectrum allocation and satellite communication licensing.
7. Gap remains: All of these are useful but piecemeal measures. A comprehensive Space Activities Law is still missing, and IN-SPACe currently functions without statutory powers, making its decisions open to challenge.
Why creating affordable insurance frameworks for space startups is crucial
1. Under the Liability Convention (1972) and the Outer Space Treaty, India is internationally liable for any damage caused by its national space objects.
2. To reduce risk to public finances, private companies must carry third-party liability insurance.
3. Space activities are high-value and high-risk, making insurance premiums very expensive. Without affordable insurance, startups will find it hard to survive.
4. Other countries like the United States cap insurance at the level of “Maximum Probable Loss” and the government shares liability above that cap. This keeps insurance affordable while still protecting the public.
5. If India adopts a similar model, it can attract investment, ensure startups are covered, and build a robust commercial space ecosystem.

Implications

Rule-of-law compliance and credibility
1. A statute operationalises Article VI obligations (authorisation/ supervision) and aligns India with mature spacefaring jurisdictions.
2. It strengthens India’s voice in international bodies like the Committee on the Peaceful Uses of Outer Space and the United Nations Office for Outer Space Affairs.
Investment, FDI, and startup scale-up
1. Clear licensing, defined timelines, appeal mechanisms, and insurance caps de-risk projects and lower cost of capital.
2. Complements FDI reforms by giving investors statutory certainty beyond policy statements.
Safety, sustainability, and public protection
1. Mandated accident investigation protocols, in-orbit servicing and de-orbit duties, and debris rules reduce externalities in Low Earth Orbit and Medium Earth Orbit.
2. Insurance and risk-sharing ensure prompt third-party compensation after mishaps.
Innovation and intellectual property security
1. Statutory intellectual property protections, data governance, and export-control clarity help retain technology and talent in India.
2. Encourages industry–academia–government collaboration under predictable rules.
Whole-of-government coherence
1. Harmonises IN-SPACe, Department of Space/ISRO, Telecom Regulatory Authority of India/ Department of Telecommunications, Bureau of Indian Standards, and Defence interfaces.
2. Reduces duplicative approvals by creating a single-window statutory regulator with defined coordination protocols.

Challenges and Way Forward

Challenges	Way Forward
No umbrella Space Activities Act: Leaves Article VI obligations and private authorisation/ supervision only on a policy footing; creates legal uncertainty	Enact a Space Activities Act that codifies authorisation, supervision, registration, safety, enforcement, penalties, and operator duties aligned to UN treaties and guidelines.
IN-SPACe lacks explicit statutory basis: Decisions vulnerable to procedural challenge; fragmented inter-ministerial clearances	Provide statutory status to IN-SPACe with clear powers, defined timelines, and single-window authority.
Licensing complexity and overlap: Time/ cost overruns for startups; inconsistent conditions	Create a consolidated licensing code with standardised application processes, eligibility criteria, and an independent appellate body.
Liability and high insurance costs: Startups face unaffordable premiums; uncertainty deters investors	Adopt Maximum Probable Loss-based insurance caps with government indemnification above that level; also create pooled insurance schemes for small operators.
Space debris and safety obligations not yet binding: Rising congestion raises collision and re-entry risks	Make debris mitigation and disposal measures legally binding; require debris mitigation plans and safe de-orbiting.
Standards adoption: Quality/safety variance increases mission risk	Reference Indian and global standards in licences; require audits and conformity checks.
FDI clarity beyond components: Capital inflows hinge on predictable ownership limits	Embed FDI thresholds in the Act and provide automatic routes for low-risk areas.
Data/IP/export-control ambiguity: Risk of technology loss and compliance delays	Define clear rules on intellectual property rights, government rights over data, and export controls.
Accident/incident investigation: Ensures accountability and lessons-learned	Establish independent investigation boards with defined timelines and reporting obligations.
Dispute resolution: Project delays due to legal uncertainty	Create a specialised appellate tribunal or arbitration framework for space disputes.

Conclusion

India’s scientific capabilities in space are advancing rapidly, but its legal framework must catch up. The Outer Space Treaty expects states to authorise and supervise private activities, which requires a comprehensive national law. By enacting a Space Activities Act, giving IN-SPACe statutory powers, defining insurance and liability rules, and ensuring innovation protection, India can build a safe, sustainable, and globally competitive space ecosystem while fulfilling its international commitments.

Ensure IAS Mains Question

Q. India’s space programme is achieving remarkable scientific milestones, yet its legal architecture remains underdeveloped. Discuss the need for a comprehensive national space law in India, in the context of international obligations, private sector participation, and long-term sustainability of space activities. (250 words)

Ensure IAS Prelims Question

Q. Which of the following statements correctly describe the Outer Space Treaty of 1967?

1. Outer space, including the Moon and other celestial bodies, is not subject to national appropriation.

2. States are responsible for all national activities in outer space, including those by private entities.

3. The treaty automatically applies within the domestic legal systems of signatory states, without the need for national legislation.

Select the correct answer using the code below:

a) 1 and 2 only

b) 2 and 3 only

c) 1 and 3 only

d) 1, 2, and 3

Answer: a) 1 and 2 only

Explanation:

Statement 1 is correct: Article II of the Outer Space Treaty (OST), 1967 clearly prohibits any nation from claiming sovereignty over outer space, the Moon, or other celestial bodies by means of occupation, use, or declaration. This ensures that space remains the “province of all mankind.”

Statement 2 is correct: Article VI of the OST makes states internationally responsible for all space activities conducted by both governmental and non-governmental actors. States must authorise and continuously supervise activities of private companies to ensure compliance with treaty principles.

Statement 3 is incorrect: The OST is not self-executing. It lays down broad international principles but does not automatically become enforceable within domestic law. Countries need to enact national space legislation to implement obligations, regulate private activities, and manage liability domestically.