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India’s FDI Policy Liberalization in the Space Sector



  Feb 22, 2024

India’s FDI Policy Liberalization in the Space Sector



The Indian government has made a strategic move to liberalize the Foreign Direct Investment (FDI) policy in the space sector, signaling a shift towards greater private sector involvement and international collaboration. This change in policy introduces a tiered approach to FDI, allowing different levels of foreign investment across various space-related activities without requiring government approval.

Key Points of the FDI Policy Amendment:

100% FDI in Satellite Component Manufacturing: Foreign investors can now fully own satellite component manufacturing entities without seeking government approval.

74% FDI in Satellite Manufacturing and Operations: For satellite manufacturing and operational activities, foreign entities can invest up to 74% automatically.

49% FDI in Launch Vehicles and Spaceports: Investments up to 49% are permitted automatically in the development of launch vehicles and spaceports.

Impact on the Industry:

This policy amendment is expected to invigorate the space sector by easing entry restrictions for foreign investors, fostering the development of satellites, launch vehicles, and associated infrastructure like spaceports. Start-ups in the space industry have expressed positive sentiments, viewing this move as a significant boost for growth and innovation.

Strategic Goals:

The government’s decision aligns with the Indian Space Policy of 2023, aiming to augment space capabilities, stimulate technology development through space ventures, enhance international relations, and build a robust ecosystem for implementing space applications among stakeholders.

The establishment of IN-SPACe in 2020 and the support provided to private space ventures, including the launch of private rockets and the creation of a private spaceport within ISRO’s campus, underscore the government’s commitment to expanding the private space industry.

This policy update is a landmark reform that positions India as a formidable player in the global space economy, attracting foreign investment and expertise while nurturing domestic innovation in space technology.

SRIRAM’s


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