India allows 100% foreign investment in space sector with new FDI policy

On Wednesday, the Union cabinet approved amendments to the FDI policy(foreign direct investment) for the space sector, enabling up to 100% investment through three categories of liberalized entry routes.

Under the amended policy, up to 100% investment is allowed under the automatic route for manufacturing components, systems, and subsystems for satellites, ground segments, and user segments, according to a government statement.

For satellite manufacturing and operation, satellite data products, and ground segment and user segment, FDI up to 74% is permitted under the automatic route, beyond which the government route will apply. In the sub-sector comprising launch vehicles and associated systems or subsystems, and the creation of spaceports for launching and receiving spacecraft, FDI up to 49% is allowed through automatic routes.

For these activities, the government route is applicable beyond 49%. The amendment allows 100% FDI under the automatic route for manufacturing components and systems/sub-systems for satellites, ground segments, and user segments.

Previously, FDI was allowed only through the government’s approval route for establishing and operating satellites. This move aligns with the vision and strategy outlined in the Indian Space Policy 2023, easing the FDI policy for the space sector by prescribing liberalized thresholds for various sub-sectors/activities.

Additionally, India’s first spy satellite made by Tata Advanced Systems Ltd (TASL) is scheduled to be launched in a SpaceX rocket by April. The satellite, a significant development, will enable the armed forces to obtain discreet information and eliminate the need to rely on foreign vendors for precise coordinates and timings. The satellite will be monitored by India, providing full ground control to the armed forces.

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