Cabinet OKs changes to space FDI policy, allows 100% foreign investment under automatic route for some activities

The Union Cabinet on February 21 approved changes to the Foreign Direct Investment (FDI) policy for the space sector, allowing up to 100 percent foreign investment under the automatic route for certain activities. These include manufacturing of components and systems and sub-systems for satellites.

The Union Cabinet, chaired by Prime Minister Narendra Modi, met in the evening of February 21.

"As per the existing FDI policy, FDI is permitted in the establishment and operation of satellites through the government approval route only. In line with the vision and strategy under the Indian Space Policy 2023, the Union Cabinet has eased the FDI policy in the space sector by prescribing liberalised FDI thresholds for various sub-sectors/activities," the government said in a statement, adding that the relaxed norms are aimed at attracting potential investors to invest in Indian companies in the space sector.

The amended norms are as follows

• Up to 49 percent FDI is now permitted under the automatic route for launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft. Beyond 49 percent, FDI in these activities will require government approval.


•  Up to 74 percent FDI is now permitted under the automatic route for satellite manufacturing and operation, satellite data products and Ground Segment and User Segment. Again, an FDI of over 74 percent in these activities will require the government's approval.


• Up to 100 percent FDI is now permitted under the automatic route for the manufacturing of components and systems or sub-systems for satellites, ground segments and user segments.

"Department of Space consulted with internal stakeholders like IN-SPACe (Indian National Space Promotion and Authorisation Centre), ISRO (Indian Space Research Organisation) and NSIL (NewSpace India Limited) as well as several industrial stakeholders. NGEs (non-government entities) have developed capabilities and expertise in the areas of satellites and launch vehicles. With increased investment, they would be able to achieve sophistication of products, global scale of operations and enhanced share of global space economy," a government statement said.