Union Cabinet Approves Liberalized FDI Policy for Space Sector

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has given the green light for amendments to the Foreign Direct Investment (FDI) policy on the space sector. The move divides the satellite sub-sector into three distinct activities, each with defined limits for foreign investment.

The decision aligns with the Indian Space Policy 2023, which was introduced as a comprehensive framework to unlock India’s potential in the space sector, fostering enhanced private participation. The policy aims to bolster space capabilities, promote commercial presence, drive technology development, and establish a conducive ecosystem for the effective implementation of space applications.

Under the existing FDI policy, approval from the government is required for the establishment and operation of satellites. In line with the vision outlined in the Indian Space Policy 2023, the amended FDI policy for the space sector eases restrictions, prescribing liberalized thresholds for various sub-sectors and activities.

The amendments specifically target the liberalization of FDI policy provisions in the space sector, facilitating a more straightforward entry route and providing clarity for FDI in satellites, launch vehicles, associated systems or subsystems, spaceports, and the manufacturing of space-related components and systems.

Key Benefits of the Amended FDI Policy:

100% FDI Allowed: The amended policy permits 100% FDI in the space sector, with liberalized entry routes to attract potential investors.

Automatic Route Thresholds: For Satellites-Manufacturing & Operation, Satellite Data Products, and Ground Segment & User Segment, up to 74% FDI is allowed under the automatic route. Beyond 74%, government approval is required.

For Launch Vehicles and associated systems or subsystems, Creation of Spaceports, up to 49% FDI is allowed under the automatic route. Beyond 49%, government approval is required.

Manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment can receive up to 100% FDI under the automatic route.

The amended FDI policy is expected to enhance private sector participation, spur employment generation, facilitate technology absorption, and contribute to making the sector self-reliant. It aligns with the ‘Make In India (MII)’ and ‘Atmanirbhar Bharat’ initiatives, encouraging global companies to set up manufacturing facilities within the country. This strategic move reinforces India’s commitment to becoming a key player in the global space economy.