India Approves 100% Foreign Investment In Space Sector

Space News ,India :- In a significant move, the Union Cabinet led by Prime Minister Shri Narendra Modi has given the green light to amend the Foreign Direct Investment (FDI) policy in the space sector. This decision brings about a division of the satellites sub-sector into three distinct activities, each with specified limits for foreign investment.

The Indian Space Policy 2023 stands as a comprehensive, adaptable framework, with a vision to unlock India's potential in the space sector by encouraging increased private participation. The policy aims to enhance space capabilities, foster a thriving commercial presence in space, leverage space as a catalyst for technology development, and create a supportive environment for effective implementation of space applications among stakeholders.

Previously, the FDI policy allowed foreign investment in the establishment and operation of satellites through the Government approval route exclusively. Aligned with the goals outlined in the Indian Space Policy 2023, the Union Cabinet has simplified the FDI policy for the space sector by introducing more flexible FDI thresholds for various sub-sectors and activities.

The Department of Space collaborated with internal stakeholders such as IN-SPACe, ISRO, NSIL, and various industrial partners. Next-Generation Enterprises (NGEs) have already demonstrated capabilities and expertise in satellite and launch vehicle areas. Increased investment is expected to elevate their products' sophistication, expand global operations, and increase their share in the global space economy.

The proposed reforms aim to liberalize FDI policy provisions in the space sector by introducing more flexible entry routes and providing clarity on FDI in satellites, launch vehicles, associated systems or subsystems, creation of spaceports, and manufacturing of space-related components and systems.

Key Benefits of the Reforms:

The amended FDI policy allows for 100% FDI in the space sector, opening up new opportunities for potential investors to invest in Indian space companies.

The entry routes for various activities under the amended policy are as follows:

1. Up to 74% under Automatic route:

• Satellites-Manufacturing & Operation
• Satellite Data Products
• Ground Segment & User Segment Beyond 74%, government approval is required.

2. Up to 49% under Automatic route:

• Launch Vehicles and associated systems or subsystems
• Creation of Spaceports for launching and receiving Spacecraft Beyond 49%, government approval is necessary.

3. Up to 100% under Automatic route:

• Manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment.

This increased participation from the private sector is expected to generate employment, facilitate the absorption of modern technology, and contribute to making the sector self-reliant. The move is anticipated to integrate Indian companies into global value chains, promoting the 'Make In India (MII)' and 'Atmanirbhar Bharat' initiatives of the Government.