PARIS — The U.S. ambassador to India on Feb. 25 gave a speech celebrating the growing U.S.-India cooperation in space.

“In September 2015, for the first time India launched a U.S. satellite – well, actually four at once,” Ambassador Richard Verma said in prepared remarks to a space policy forum in New Delhi. “The satellites belonged to a U.S. company, and India launched them from its trusted workhorse – the Polar Satellite Launch Vehicle, which has launched satellites for 20 different countries. Other U.S. companies have sought launches on India’s PSLV, including a Google satellite scheduled for launch in April.”

The next day, the U.S. Department of Transportation’s Federal Aviation Administration (FAA) endorsed an advisory committee’s recommendation that commercial U.S. satellites continue to be barred from using the PSLV.

In its Feb. 26 decision, the FAA said it agreed with its Commercial Space Transportation Advisory Committee (COMSTAC) that Indian launch services, owned and controlled by the Indian government, threaten to “distort the conditions of competition” in the launch-services market.

The FAA assured COMSTAC that the agency’s opinion would be part of the current review of whether India’s refusal to sign a Commercial Space Launch Agreement (CSLA) on rocket pricing still justifies the ban. The review, led by the U.S. Trade Representative, is the reason COMSTAC had raised the issue.

The ambassador’s speech and the FAA’s decision would appear to come from two different governments, which industry officials on both sides said pretty much sums up the state of U.S. policy.

“There is a real dysfunction on the government side,” said one U.S. industry official whose company wants the government to maintain a no-license bias with respect to the PSLV. “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.”

“Falling over themselves” may be an exaggeration, but as Ambassador Verma noted, several commercial U.S. satellite owners and at least one non-U.S. company – Airbus Defence and Space, whose Spot 6 and Spot 7 commercial Earth observation satellites have U.S. components – have succeeded in launching on the PSLV after obtaining waivers.

The CSLA, dating from 2005, is the U.S. government’s way of protecting the seemingly forever-nascent U.S. small-satellite launch industry from competing with government-controlled foreign launchers for U.S. business. It seeks to oblige non-U.S. rocket providers to sign a CSLA that, for all intents and purposes, sets U.S. commercial launch prices as the world minimum for government-owned non-U.S. launch providers.

The rationale is that these non-U.S. launchers, not bound by the constraints of profit and loss – but hungry for hard-currency export earnings – will undercut commercial U.S. companies’ launch prices and keep them from gaining market traction.

That is COMSTAC’s rationale, most recently reinforced at a Jan. 27 conference call of its International Space Policy Working Group in preparation of its FAA submission.

“[M]any dedicated small satellite launch vehicles are currently being developed with private investment. Most of these new launch vehicles are scheduled to be operational in 2016 and 2017,” COMSTAC said.

“[A]llowing India’s state-owned and controlled launch providers to compete with U.S. companies runs counter to many national policies and undermines the work that has been done by government and industry to ensure the health of the U.S. space launch industrial bases,” COMSTAC concluded.

Unlike its launcher counterpart, the U.S. small satellite industry has taken off in recent years, with several companies moving quickly from aspiration to execution. Spire Global and Planet Labs, both of San Francisco; and Google Skybox Imaging, now renamed Terra Bella, of Mountain View, California, have all started launching constellations.

Spaceflight Industries of Seattle, Washington, is doing likewise with its own constellation, set for launch starting this year on the PSLV. Through its sister company, Spaceflight Services, it is also brokering launch services for other satellite owners.

These companies have said options are limited for satellites whose size means they can never order, on their own, a full U.S. launch vehicle in today’s market. The small rockets are rare, of uncertain schedule reliability and are priced too high, they say. The larger rockets, which occasionally make room for secondary passengers, launch when their larger primary passengers are ready, not before.

None of these companies are members of COMSTAC, which advises FAA’s Office of Commercial Space Transportation and as such has a membership focused more on rockets than on satellite payloads.

The CSLA was once known as the “SpaceX Agreement” because Hawthorne, California-based SpaceX was introducing a new rocket, called Falcon 1, which appealed directly to small satellite owners.

But Falcon 1 was discarded in 2009 as SpaceX moved to the Falcon 9 to launch heavier payloads for NASA and the commercial sector.

Falcon 1’s retirement left a hole in the U.S. small-satellite launch market that has yet to be filled by anyone else, although several companies have announced plans to enter the business.

But the policy has not changed, despite the contrast between the rapid development of a U.S. small satellite market and a corresponding launch sector. The gap is understandable: Up to now, it has proved easier to make a profit operating commercial satellites than operating commercial rockets.

At the recent Satellite 2016 conference in National Harbor, Maryland, a U.S. State Department official said the ban on commercial use of Indian rockets, except for civil, noncommercial satellites, remains in place despite the fact that it no longer bears much relevance to SpaceX.

“It’s not State Department policy, it’s a U.S. Trade Representative policy,” said Anthony M. Dearth, director of licensing at the State Department’s Directorate of Defense Trade Controls.

“I don’t know how much impact SpaceX has on it,” Dearth said March 9. “They entered the market with the Falcon 1 for small objects. Now they’re chasing U.S. government assets. We’ve heard from small satellite manufacturers that SpaceX isn’t interested in small satellites.”

COMSTAC declined to respond to requests for comment on what it meant when it told the FAA that several new commercial rockets “are scheduled to be operational in 2016 and 2017.”

One small satellite owner said his company would go out of business if it had to wait for a reliable and cost-effective U.S. small satellite launch industry to be created.

An official with a commercial launch service provider had another view. It goes beyond launch services, this official said. India has not fully opened its satellite telecommunications market to non-Indian satellite service providers, funneling all satellite bandwidth contracts through the Indian Space Research Organisation.

“This is a country that is basically closed to us, and that’s an understatement,” this official said. “Why are we unilaterally allowing access to the U.S. market?”