Arvind's Newsletter

1.A to Z: what has changed since the last time the World Cup was in India

As cricket lovers wait for the World Cup later this year, it is worth reading Sidharth Monga’s piece in the Cricket Monthly as recap of what has changed since the last event.

Fingerspinners have seen their role shrink, batting allrounders have all but vanished, and… what, no West Indies?

2.Understanding IMD's September rainfall projection

Southwest monsoon is expected to revive in September, with rainfall seen normal during the month in the range of 91-109% of the long period average of 167.9 mm, the India Meteorological Department (IMD) has forecast. This comes after the country experienced its driest August since 1901.

Normal to above normal rainfall is most likely over many areas of northeast India, adjoining east India, foothills of the Himalayas and some areas of east-central and south peninsular India. The below-normal rainfall is most likelyover most areas of the remaining parts of the country.

Even if rainfall in September is on the higher side, the June-September rainfall average is expected to be below normal for the whole season

3.Gold: The Anti-Bubble

Gold is not a risk asset, it is an insurance policy, and the gold mining industry will one day leverage that characteristic, writes Gary in Notes from Rabbit Hole blog. Indian’s women have known down the ages.

Just as a standard financial insurance policy is meant to only pay out when bad things happen, gold will only pay out when bad financial things happen. Sure, it’s assigned price can rise with other asset markets, but it’s price related to risk assets will under-perform when said risk assets are in a bull phase or an unbroken bubble.

4.Are self-driving cars already safer than humans?

Waymo and Cruise have driven a combined total of 8 million driverless miles ... That includes more than 4 million in San Francisco since the start of 2023. And because California law requires self-driving companies to report every significant crash, we know a lot about how they’ve performed." We hear a lot on both sides of the (inevitable) move to self-driving cars. In Ars Technica Timothy Lee asks the one question that matters most as above.

5.Making Space for India

Sinéad O’Sullivan, a former Senior Researcher at Harvard Business School’s Institute for Strategy and Competitiveness, has must read piece in the Financial Times. Its a Long Read but worthwhile. Some excerpts:

“So it turns out that for the same price as one of their Gulfstream private jets, space barons Elon Musk and Jeff Bezos could have sent a lander to the moon. India’s space agency ISRO (the Indian Space Research Organization) successfully landed its Vikram lander on the moon last week, as part of its $75mn Chandrayaan-3 lunar mission.

It prompted a pretty obvious question: How the hell can India send robots to the moon for less than (eg) half the cost of making the movie Interstellar ($165m)?

Let’s look at some of the lunar data points we do have. Blue Origin’s lunar lander development program for NASA’s Artemis (“Back to the moon”) mission is set to cost around $7bn. Which is a lot more than $75mn, but also isn’t really comparable because it’s for a human-rated system to be used as part of a far more complicated mission.

On the other hand, mere hours before India’s success, Russia sent a lunar probe to the moon that failed to successfully land. This spacecraft, Luna-25, is said to have cost $130mn. So much closer in price to India’s mission, although still 73 per cent more expensive.

Instead of comparing moon apples to oranges, let’s examine an area where there actually is quite a bit of data (and drama): the rocket launch market. Let’s start by comparing the Space Superpowers: the United States and China. USA had 66 launches across only 5 rockets, and dominantly only one SpaceX’s Falcon 9 vs China had 37 launches across 18 rockets.

Perhaps NASA’s greatest innovation wasn’t the Space Shuttle, but convincing private markets to pay for rockets on its behalf. And, essentially, to offload expensive rocketeering from the Department of Defense’s balance sheet.

Despite a total addressable global market of just $10bn, private markets have happily poured more than that amount into financing what appears to be, thus far, low- to no-profit launch businesses. The US government, in response, has collaborated closely with these private companies by being the customer of first resort, and giving the capital-intensive startups much-needed revenue through multi-year launch contracts. Unlike the Chinese launch market, which endeavours to serve only the Chinese government for now, Western launch startups are “dual use”, and as such serve civilian and government customers alike.

The heavy competition at the earliest stages by the private markets ultimately down-selects engineering and business models early, and thus inhibits how many later-stage launch companies will be able to offer services. This is why it looks like there may be a “winner takes all” dynamic appearing in the graph above, and why some in the DoD seem to be growing agitated by Elon Musk’s power. In reality, even if the space launch market doesn’t exhibit network effects, venture capital financing does.

On the other hand, the Chinese launch market paints a very different story; one of various launch services with Chinese characteristics. Like in its technology sector, the Chinese government, whether directly or through state-sponsored VC investment funds, will back many horses in many races. The Chinese innovation model seeks to create huge internal competition so that, by the time a winner emerges, it is able to withstand external competition with the West’s offerings. We have seen this with social networking, payment platforms and space launch services.

Financing numerous R&D startups is an expensive way for the government to produce a winner, but — within the usual ideological goals of long-termism and sustainability — there is less risk of creating a single point of failure (as Europe did with its now discontinued Ariane 5 vehicle). For China, there is only one thing worse than having a too-expensive rocketry programme: having no rocket at all.

Which brings us to the sometimes-forgotten-about, not-quite-but-could-nearly-be space power: India.

India has an impressive number of rocket launchers for the size of its space economy, which despite being closer to China’s government-led programme than NASA’s commercial endeavours, has benefited heavily from cost-effective technologies, a high-growth startup culture, and an abundance of young, highly-technical engineers.

Moreover, it has launched an impressive array of different missions from its growing rocket collection: two for navigation purposes, and one each in the test platform, exploration, remote sensing and communications categories.

Looking at it another way: the US has access to five rockets with an annual space programme budget of $25bn. India has access to five rockets with an annual space programme budget of $1.6bn. And this is after the US has outsourced significant areas of its rocketry to the private markets. But this still isn’t really comparing apples to apples either, so let’s look at individual launcher economics instead of grand space budgets.

NASA’s Space Launch System (SLS), a super-heavy lift vehicle, is currently six years behind schedule, and is estimated to have a final cost of nearly $13bn with a $2–4bn cost per launch.

Not amazing. India’s Launch Vehicle Mark-3 (LVM3) medium-lift vehicle, which launched the recent Chandrayaan-3 mission, had a total development cost of $560m and costs $63m per launch. There’s definitely more (propulsive) bang per buck here!

On the other hand, to get the Falcon 9 to where it is today, SpaceX and NASA together invested around $950 million (in private markets), with the Falcon 9 having a $67 million launch price. So the world’s most efficient and talked-about rocket is actually nearly comparable to India’s largely unknown vehicle, as far as design and build economics are concerned.

The standout takeaway for me is evidence that India is positioning to be able to compete not only with the US and China’s state space programmes, but private market programs like SpaceX — believed by many to be the world’s most competitive.

When asked about how they have been able to achieve mission critical success, ISRO representatives are either being humble or will attribute its low-cost and nimble ingenuity to “parts cost savings” by sourcing components within India.Someone once told me ISRO employees work hard to vent their frustration because the traffic to get to the office is just so bad, which I’m not sure is an explanation that should get too much credit.

With an eye on capturing a larger market share of private sector space launches globally, and having access to US as well as Chinese customers, it will be interesting to see if India’s progress shows that modest public space programmes can globally compete with China’s heavily-sponsored state programme or the private-market solutions of the US.

With over 100 space-related startups in existence, and rapidly growing, it’s not inconceivable that the so-called New Space Race could be won by a third, more humble competitor: India.