Union Cabinet Approves Liberalized FDI Policy Amendments for Space Sector

GG News Bureau
New Delhi, 22nd Feb. In a significant move aimed at boosting India’s space sector, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved amendments to the Foreign Direct Investment (FDI) policy on space.

Under the amended policy, the satellites sub-sector will be divided into three distinct activities, each with defined limits for foreign investment.

The amendments come in the backdrop of the Indian Space Policy 2023, a comprehensive framework aimed at unlocking India’s potential in the space sector through increased private participation. The policy seeks to enhance space capabilities, foster commercial presence, drive technology development, and strengthen international relations in the space arena.

Previously, FDI in the establishment and operation of satellites required government approval. However, the new amendments relax these regulations, prescribing liberalized thresholds for various sub-sectors and activities within the space domain.

The Department of Space, in consultation with key stakeholders including IN-SPACe, ISRO, NSIL, and industrial players, identified the need to attract more investment to drive sophistication, scale, and competitiveness in satellite and launch vehicle technology.

Key highlights of the amended FDI policy include:

– 100% FDI allowed in the space sector.
– Liberalized entry routes for various activities, including manufacturing and operation of satellites, satellite data products, ground segment, user segment, launch vehicles, spaceports creation, and manufacturing of space-related components and systems.
– Activities such as satellites manufacturing & operation, satellite data products, and ground segment & user segment allow up to 74% FDI under the automatic route.
– Launch vehicles and associated systems or subsystems, as well as creation of spaceports, permit up to 49% FDI under the automatic route.
– Manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment allows up to 100% FDI under the automatic route.

These amendments are expected to stimulate private sector participation, foster employment generation, facilitate technology absorption, and bolster self-reliance in the space sector.

The move aligns with the government’s ‘Make In India (MII)’ and ‘Atmanirbhar Bharat’ initiatives, encouraging domestic manufacturing and integration into global space value chains.