Cabinet approves amendment in FDI policy in Space Sector

The Union Cabinet, under the leadership of the Prime Minister, has recently approved significant amendments to the FDI policy in space sector, aimed at enhancing private participation and unlocking India’s potential in space exploration and technology development.

Significance of the recent move:

• This move aims to enhance private participation and unlock India’s potential in space exploration and technology development.
• The Indian Space Policy 2023 has been enacted to provide a framework for augmenting India’s space capabilities, fostering commercial presence, driving technology development, and promoting international relations in space endeavours.
• 100% FDI is now permitted in the space sector, aiming to attract potential investors and boost Indian companies.
• Liberalized entry routes encourage investment, modern technology absorption, and self-reliance in the sector.
• Private sector participation is expected to generate employment, integrate Indian companies into global value chains, and support initiatives like ‘Make In India (MII)‘ and ‘Atmanirbhar Bharat‘.

Key highlights of the amendments in policy:

• It divides the satellites sub-sector into 3 distinct activities with defined limits for foreign investment.
• The existing FDI policy restricted investment in satellite establishment and operation to the Government approval route.
• However, under the new policy, liberalized FDI thresholds have been prescribed for various sub-sectors or activities.
• The amended policy liberalizes entry routes and provides clarity on FDI in:
  • Satellites Manufacturing & Operation, Satellite Data Products, and Ground Segment & User Segment (up to 74% under Automatic route).
  • Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft (up to 49% under Automatic route).
  • Manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment (up to 100% under Automatic route).

Ref: Source