In a significant move aimed at unlocking India’s potential in the space sector, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved an amendment in the Foreign Direct Investment (FDI) policy. The amendment brings forth a liberalized approach, dividing the satellites sub-sector into specific activities with defined foreign investment limits.
Under the Indian Space Policy 2023, a comprehensive framework was established to enhance private participation, augment space capabilities, foster commercial presence, drive technology development, and strengthen international relations. The amendment aligns with the vision outlined in this policy, easing the FDI policy provisions and providing clarity for various sub-sectors and activities within the space domain.
Previously, FDI in the establishment and operation of satellites required government approval. The new amendment brings about a significant shift by prescribing liberalized FDI thresholds for activities such as Satellites-Manufacturing & Operation, Satellite Data Products, Ground Segment & User Segment, Launch Vehicles, and associated systems or subsystems, as well as the creation of Spaceports for launching and receiving Spacecraft.
The amended FDI policy allows 100% FDI in the space sector, aiming to attract potential investors to Indian companies in the space domain. The entry routes for different activities are categorized as follows:
- Satellites-Manufacturing & Operation, Satellite Data Products, Ground Segment & User Segment:
- Up to 74% under Automatic route.
- Beyond 74%, government route.
- Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft:
- Up to 49% under Automatic route.
- Beyond 49%, government route.
- Manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment:
- Up to 100% under Automatic route.
The liberalized FDI policy is expected to enhance private sector participation, stimulate employment, facilitate technology absorption, and foster self-reliance in the sector. It is anticipated to integrate Indian companies into global value chains, promoting ‘Make In India’ and ‘Atmanirbhar Bharat’ initiatives.
