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Govt notifies liberalised FDI norms for space sector to boost foreign investment

The liberalised entry routes under the amended policy are aimed at attracting potential investors in Indian companies in the space sector.

Govt notifies liberalised FDI norms for space sector to boost foreign investment

Thursday April 18, 2024 , 2 min Read

The government has notified amendments to the foreign direct investment policy in the space sector to attract offshore investors in satellite manufacturing and satellite launch vehicles segments.

The amendment made in the FDI policy for the space sector through a gazette notification dated April 16, 2024, prescribes liberalised entry route and provides clarity for FDI in satellites, launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft, and manufacturing of space-related components and systems.

"These rules may be called the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024," the gazette notification said.

The liberalised entry routes under the amended policy are aimed at attracting potential investors in the Indian companies in the space sector.

The Union Cabinet, earlier this year, gave approval to these amendments.

The notification comes days ahead of the scheduled visit of Tesla CEO Elon Musk who is expected to meet with various Indian space companies on April 21 and 22. Concurrently, approvals for Musk's satellite internet project, Starlink, are nearing finalisation.

As per the notification, up to 74% FDI for satellite manufacturing & operation, satellite data products and ground segment & user segment is allowed under automatic route. Beyond 74%, these activities are under government route.

FDI up to 49% is allowed for launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft are under the automatic route but beyond 49% government permission would be required.

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Government eases FDI norms in space sector; 100% in making components for satellites

Besides, 100% FDI is allowed for manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment without government permission.

As per the earlier norms, FDI was permitted in establishment and operation of satellites through the government approval route only.

In line with the vision and strategy under the Indian Space Policy 2023, the Union Cabinet has eased the FDI policy in the space sector by prescribing liberalised FDI thresholds for various sub-sectors/activities.

The Department of Space consulted with internal stakeholders including IN-SPACe, Indian Space Research Organisation(ISRO) and NewSpace India Limited, as well as several industrial stakeholders.

Non-government entities have developed capabilities and expertise in the areas of satellites and launch vehicles. With increased investment, they would be able to achieve sophistication of products, global scale of operations, and enhanced share of the global space economy.


Edited by Swetha Kannan