New Delhi, Apr 20 (KNN) India must prioritise implementing a comprehensive insurance framework that harmonises clear regulations, robust financial market mechanisms, and close coordination with industries to boost its rapidly growing commercial space industry, according to a report.

Released on Friday by Spaceport SARABHAI, a dedicated space think tank based in Bengaluru, the report titled "Financial Risk Coverage of India's Commercial Space Launch Industry: Need for Developing Insurance and Reinsurance Capabilities" examines the necessity for a regulatory framework to address financial risk coverage for the space industry in India. 

It delves into the existing body of space law, including a comparative analysis of global best practices for risk governance in the space industry.

While India unveiled its Space Policy in 2023, aimed at encouraging and developing a thriving commercial presence in space, the report highlights that the policy falls short of comprehensively addressing space insurance and liability issues.

The report outlines two distinct approaches adopted by nations when addressing insurance obligations. The first approach involves regulating and describing the extent of the insurance obligation within the legislation itself, while the second approach leaves the specifics to be mentioned in the license.

Advocating for the adoption of the first approach, the report states that by regulating and describing the insurance obligation in national legislation, the Indian government would provide the private sector with clear expectations and certainty regarding their liability obligations, enshrined in law and enforceable in court.

Moreover, the report cites India's historical experience with bureaucratic inefficiencies, famously known as the 'license-raj,' as a compelling reason to adopt the first approach. By codifying the specifics of liability and insurance in legislation, the report argues, India can mitigate the risk of excessive and rigid rules imposed by government officials on a case-by-case basis.

The report's recommendations underscore the pressing need for India to establish a comprehensive insurance strategy, combining regulatory clarity, financial market development, and industry alignment, to foster a thriving and sustainable commercial space sector.

(KNN Bureau)