On Wednesday, the Indian government announced amendments to the FDI (foreign direct investment) norms surrounding the space sector. According to a notification, the satellites sub-sector has been divided into three different activities, and there's up to 100% FDI under automatic route allowed. Until now, FDI was only permitted in the establishment and operation of satellites through the government approval route. But that has changed.
The proposed reforms for FDI for the space sector are aligned with the vision of the Indian Space Policy 2023. Non-government entities (NGEs) have developed great expertise in the field of satellites and launch vehicles. With more investments, they can come up with better products, scale their operations, and enhance India's share in the global space economy.
Here's how FDI can come into the Indian space sector after the amended norms.
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What is the Amended FDI Policy for the Indian Space Sector?
Under the amended FDI policy, up to 100% FDI is allowed for the Indian space sector. This will help the Indian space companies grow faster. Mentioned below are the three categories in which the investments would be allowed:
a) Up to 74% under Automatic Route: Satellite-manufacturing and operation, satellite data products, ground segment and user segment. Any investment (foreign) beyond 74% will have to go through the government route.
b) Up to 49% under Automatic Route: Creation of spaceports for launching and receiving spacecraft, launch vehicles and associated systems or subsystems. Beyond 49% FDI, the activity will be through the government route.
c) Up to 100% under Automatic Route: Manufacturing of components and systems/sub-systems for satellites, ground segment and user segment.
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Lt Gen. AK Bhatt, Direcor General, Indian Space Association (IsPA), said, "We are thankful to the Government, and it is heartening to note the pace of its forward-looking reforms in the nascent space sector. After the pioneering initiative to administratively allocate satellite spectrum, today’s decision to allow a liberal FDI policy for space is yet another significant move forward. The liberal FDI limits by automatic route for end-to-end satellite manufacturing & operation, components and systems/ sub-systems for satellites, satellite data products and ground segment & user segment, launch vehicles, creation of spaceports will boost the confidence of all space industry members, including the biggest global players in the space and satellite domain."
