India Amends FDI Norms in Space Sector

In a significant move to attract foreign investment in the Indian space sector, the government has notified amended Foreign Direct Investment (FDI) norms recently. The revised guidelines clear the deck for 100 percent overseas investment in manufacturing components for satellites, 74 percent in satellite manufacturing and operations, and 49 percent in launch vehicles. Any investment beyond these limits will require government approval.

Amendments to the Consolidated FDI Policy

The amendments have been made under Para 5.2.12 of the Consolidated FDI Policy Circular of 2020. The revised policy outlines the following sectoral caps and entry routes for various activities in the space sector:

Satellites – Manufacturing & Operation

– Sectoral Cap: 100%

– Up to 74%: Automatic route

– Beyond 74%: Government route

Satellite Data Products

– Sectoral Cap: 100%

– Up to 74%: Automatic route

– Beyond 74%: Government route

Ground Segment & User Segment

– Sectoral Cap: 100%

– Up to 74%: Automatic route

– Beyond 74%: Government route

Launch Vehicles and Associated Systems or Subsystems

– Sectoral Cap: 100%

– Up to 49%: Automatic route

– Beyond 49%: Government route

Creation of Spaceports for Launching and Receiving Spacecraft

– Sectoral Cap: 100%

– Up to 49%: Automatic route

– Beyond 49%: Government route

Manufacturing of Components and Systems/Subsystems for Satellites, Ground Segment, and User Segment

– Sectoral Cap: 100%

– Up to 100%: Automatic route

The investee entity shall be subject to sectoral guidelines as issued by the Department of Space from time to time.

The amended policy also provides definitions for various terms related to the space sector like Satellites, Satellite data products, Ground Segment & User Segment Ground Segment & User Segment etc.

Background and Rationale

The recent move to amend FDI norms in the space sector comes against the backdrop of tepid foreign investment in the country’s space sector over the last two years. By easing the FDI norms, the government aims to attract more foreign investment, foster technological advancements, and promote the growth of the Indian space industry.

 

 


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