The Indian Cabinet Approves an Amendment for Space Sector FDI

As an exclusive update from our reliable sources, it has been notified that the Union Cabinet of India has given the nod to an essential amendment to the Foreign Direct Investment (FDI) policy, bringing the space sector under its ambit. The shift was confirmed in a recent governmental press briefing.

Different Limits for Different Space Subsectors

The amendment has found an innovative way to categorize the satellites sub-sector into three activities, each holding its individual limits on foreign investment. The newly approved FDI policy permits up to 74% foreign investment under the Automatic route for Satellite-Manufacturing & Operation activities. This also covers Satellite Data Products, and Ground Segment & User Segment. However, any investment exceeding this 74% benchmark is subject to further governmental authorization.

Investments in Launch Vehicles and Other Areas

When it comes to Launch Vehicles, associated systems or subsystems, and the Creation of Spaceports for launching and receiving spacecraft, foreign investment is capped at 49% under the Auto route. Similar to the above category, any additional investment also comes under the jurisdiction of government approval. Yet, for the Manufacturing of components and systems/sub-systems for satellites, the ground segment, and user segment, the new FDI policy goes a step further, allowing 100% foreign investment under the Automatic route.

Amendment in Sync with Indian Space Policy 2023

This amendment corresponds appropriately with the vision and strategy laid out in the Indian Space Policy 2023. The new FDI policy aims to attract potential investors to invest in Indian space sector companies, thereby galvanizing the progress of Non-Government Entities (NGEs) in terms of their capabilities and expertise in the manufacture and operation of satellites and launch vehicles.

Expected Impact on the Indian Space Sector

The updates in the FDI policy hold high expectations to facilitate India in reaching a more sophisticated product market, achieve operations at a global scale, and augment its share in the worldwide space economy. Forecasting the prospective growth, the industry can escalate from its current $8 billion valuation to possess values between $40-100 billion within the timeframe leading to 2040.