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Global chip shortage: High lead times, import woes plague Indian space tech startups

According to Naga Bharat Daka, co-founder of Hyderabad-based Skyroot Aerospace, a free trade agreement with European Union supply chain players would benefit the space tech ecosystem.

The ongoing global chip shortage has had an impact on the Indian space tech startup ecosystem, with many of these players raising concerns about the long lead times for importing certain items such as chips, sensors, and other materials.

With Skyroot Aerospace launching India's first private rocket into space, and recently, Bengaluru's Pixxel and Hyderabad's Dhruva Space launching their satellites aboard ISRO's PSLV-C54, there has been a lot of activity in the Indian space tech ecosystem.

These longer lead times in importing items naturally contribute to a startup's delayed plans.

"For the last couple of years, the semiconductor industry has been a problem. Components that had a 16-week lead time or 10-week lead time are now at 40, 50- week lead times," Kshitij Khandelwal, co-founder and chief technology officer of Pixxel told Moneycontrol.

The start-up manufactures hyperspectral earth imaging satellites and analytical tools through which it aims to mine data and derive insights.

Apart from electronics and a few metals that are not mined in India, Karnam stated that Bellatrix, as a strategy, indigenises many of its systems. "Either we do it within Bellatrix or we do it with ISRO (Indian Space Research Organisation) recognised vendors who are already supplying," Karnam told Moneycontrol.

Skyroot Aerospace, which manufactures launch vehicles, has also indigenised the majority of its systems. When it comes to electronics, however, they continue to rely on the global supply chain.

According to Naga Bharat Daka, co-founder of the start-up, the current lead time for electronics is five times longer than it was before Covid-19.

Importing initial measurement systems, which are required for rocket navigation, has also caused delays for the startup. According to Daka, the lead time for these systems is as long as four months.

"If the government can get into a free trade agreement with the European Union ecosystem where there are sophisticated suppliers, then it would benefit the Indian space tech ecosystem a lot," Daka said.

For Khandelwal of Pixxel, following up with vendors and relying on the close-knit space technology industry aids in addressing such issues.

"We follow up with our vendors regularly. Some of our vendors are outside India, so we go there to check if things are being done correctly. Because not everyone is as incentivised to get this done on time as you are," Khandelwal said.

The Ministry of Electronics and Information Technology (MeitY) recently announced an incentive scheme to boost India's semiconductor ecosystem in December 2021.

With an initial overlay of Rs 76,000 crore, the scheme provides financial incentives ranging from 30 to 50 percent of either the total project cost or capital expenditures, depending on the type of proposed manufacturing facility.

On September 21, the Union Cabinet approved modifications to the scheme.

Union minister Rajeev Chandrasekhar recently said that India expects to break ground on up to two fabs and packaging units in the next 18-24 months.

“We not only have a blueprint in terms of semiconductor research, design and manufacturing, but also an approach to integrate higher education with it and develop a talent strategy. We will be the hub of talent for the global electronics ecosystem,” Chandrasekhar said at a technology conference in Delhi on October 26.

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