India’s space sector opens up to foreign investment following Union Cabinet’s approval

New Delhi: The Union Cabinet has approved the Foreign Direct Investment (FDI) amendment policy pertaining to the space sector. Under this policy, the satellite sub-sector has been restructured into three distinct activities, each with specified limits for foreign investment.

Previously, FDI in the establishment and operation of satellites required government approval. However, the revised policy introduces liberalised entry routes, designed to attract potential investors to Indian space companies.

The Indian Space Policy 2023 serves as a comprehensive framework to enhance private involvement in the space sector. The FDI policy aligns with this overarching vision, aiming to bolster space capabilities, foster commercial presence, drive technology development, and strengthen international relations.

Key highlights of the amended policy include:

• Satellites Segment: Up to 74% FDI is permitted under the automatic route for manufacturing and operation, satellite data products, ground segment, and user segment. Beyond 74%, government approval is necessary.
• Launch Vehicles and Spaceports: Up to 49% FDI is allowed under the automatic route for launch vehicles and associated systems or subsystems, as well as the creation of spaceports. Investments exceeding 49% require government approval.
• Manufacturing: 100% FDI is permitted under the automatic route for manufacturing components and systems/subsystems for satellites, ground segment, and user segment.

This policy revision enables companies to establish manufacturing facilities within India, aligning with the government’s ‘Make In India’ and ‘Atmanirbhar Bharat’ initiatives.

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