New Delhi: Aimed at bolstering India’s space sector and fostering self-reliance, the Government of India has approved an amendment to the Foreign Direct Investment (FDI) policy, allowing 100% foreign investment in the space industry, informed Anurag Singh Thakur, Information and Broadcasting Minister following a Union Cabinet meeting in New Delhi.
The liberalized entry routes under the amended policy are designed to attract potential investors to invest in Indian companies operating in the space sector. This move is part of the government’s broader vision to enhance private participation and establish India as a key player in the global space economy.
Under the amended policy, foreign direct investment up to 100% will be permitted under the automatic route for the manufacturing of components, systems, or sub-systems for satellites, ground segments, and user segments.
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the amendment, which divides the satellite sub-sector into three different activities, each with defined limits for foreign investment.
The Indian Space Policy 2023, which serves as an overarching framework, aims to unlock India’s potential in the space sector through enhanced private participation. The policy seeks to augment space capabilities, develop a robust commercial presence, drive technology development, and leverage space applications for the benefit of all stakeholders.
Previously, FDI in the establishment and operation of satellites was permitted only through the government’s approval route. However, in line with the vision outlined in the Indian Space Policy 2023, the Union Cabinet has eased the FDI policy to encourage greater private sector participation in the space sector.
The Department of Space consulted with various stakeholders, including IN-SPACe, ISRO, NSIL, and industrial stakeholders, before implementing these reforms. The increased investment is expected to enhance the sophistication of products, enable global-scale operations, and increase the share of the global space economy.
The liberalized FDI policy provisions in the space sector aim to provide clarity and prescribe liberalised entry routes for various sub-sectors and activities, including satellites, launch vehicles, the creation of spaceports, and the manufacturing of space-related components and systems.
The amended policy allows for 100% FDI in the space sector, with entry routes varying for different activities. Satellites’ manufacturing and operation, satellite data products, and ground segments and user segments allow up to 74% FDI under the automatic route, with activities beyond 74% requiring government approval. Launch vehicles and associated systems or subsystems, as well as the creation of spaceports, allow up to 49% FDI under the automatic route, with activities beyond 49% requiring government approval. Manufacturing of components and systems/sub-systems for satellites, ground segments, and user segments allows up to 100% FDI under the automatic route.
This increased private-sector participation is expected to generate employment, facilitate technology absorption, and promote self-reliance in the sector. It is also anticipated to integrate Indian companies into global value chains, encouraging the ‘Make In India’ and ‘Atmanirbhar Bharat’ initiatives of the Government.
