In a significant move, the Union Cabinet, led by Prime Minister Narendra Modi, has given the green light to amend the Foreign Direct Investment (FDI) policy for the space sector, paving the way for up to 100 percent FDI in this domain.
The satellites sub-sector has been delineated into three distinct activities, namely Launch Vehicles, Satellites, and Satellite Components.
As per the revised policy, up to 49 percent FDI is permissible in launch vehicles, 74 percent in satellites, and 100 percent in satellite components.
The activities falling under 'Launch Vehicles' encompass associated systems or subsystems, along with the establishment of spaceports for spacecraft launch and reception.
Similarly, the 'Satellites' category includes manufacturing and operation, satellite data products, as well as ground segment and user segment.
Previously, FDI was only allowed in the establishment and operation of satellites via the government approval route. However, in alignment with the vision outlined in the Indian Space Policy 2023, the Cabinet has introduced relaxed FDI thresholds for various sub-sectors/activities in the space sector, aiming to facilitate greater private sector involvement.
The liberalized entry routes under the amended policy seek to attract potential investors to invest in Indian space companies. This enhanced private sector participation is expected to spur job creation, facilitate the adoption of modern technology, and foster self-reliance in the sector. Moreover, it is anticipated to integrate Indian firms into global value chains.
The official statement issued after the Cabinet meeting highlighted that these measures would enable companies to establish their manufacturing facilities within the country, thereby promoting the 'Make In India (MII)' and 'Atmanirbhar Bharat' initiatives of the government.
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