Indian government opens doors to 100% FDI in space sector

The Union Cabinet, led by Prime Minister Narendra Modi, has given the green light to allow up to 100% foreign direct investment (FDI) in select activities within the space sector.

This decision marks a pivotal shift from the previous policy, which mandated government approval for any FDI in satellite establishment and operation. The new policy aligns with the Indian Space Policy 2023 and aims to foster a more liberalized approach towards foreign investment in the space domain.

Under the revised FDI framework, the space sector has been delineated into three distinct categories. Firstly, activities such as satellite manufacturing and operation, satellite data products, as well as ground and user segments will now permit up to 74% FDI via the automatic route, with government approval required for investments beyond this threshold.

Secondly, FDI of up to 49% will be permissible through the automatic route for endeavors related to launch vehicles, associated systems or subsystems, and the establishment of spaceports. Again, any investments exceeding this limit will necessitate government clearance.

Thirdly, in a move aimed at stimulating indigenous manufacturing capabilities, the government has paved the way for up to 100% FDI in the manufacturing of components and systems/sub-systems for satellites, ground, and user segments, with approvals granted automatically.

According to government statements, this decision follows extensive consultations with key stakeholders including IN-SPACe, ISRO, NSIL, and various industrial entities. The move is expected to attract significant investment, enabling Non-Government Entities to enhance their technological prowess, scale operations globally, and capture a larger share of the global space economy, reported CNBC TV18

With India's space sector poised for expansion and innovation, the liberalization of FDI regulations is anticipated to fuel growth, foster technological advancements, and bolster the country's competitive edge in the realm of space exploration and satellite technology.

Also Watch: Salaries in India projected to rise by 9.5% in 2024, manufacturing sector to lead: Aon Survey