FDI Booster Shot For India’s Space Plans

In a significant move aimed at bolstering India’s position in the global space sector, the Union Cabinet, under the leadership of Prime Minister Shri Narendra Modi, has given the green light to amendments in the Foreign Direct Investment (FDI) policy concerning the space sector. This strategic decision is aligned with the vision of an Aatmanirbhar Bharat, championed by Prime Minister Narendra Modi.

The amendments mark a pivotal shift in the FDI policy framework, specifically targeting the space sector, thereby ushering in a new era of opportunities for both domestic and international investors. Under the revised policy, the space sector has been liberalized, allowing for foreign direct investment in specified sub-sectors and activities, a move poised to enhance the ease of doing business in the country and stimulate greater FDI inflows.

▶️ Cabinet approves amendment in the Foreign Direct Investment (FDI) policy on Space Sector

▶️ Space sector has been liberalised for FDI in prescribed sub-sectors/activities pic.twitter.com/hR2DmF6gbn

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One of the key highlights of the amendment is the division of the satellites sub-sector into three distinct activities, each with defined limits for foreign investment. This strategic delineation aims to provide clarity and structure, facilitating smoother investment processes and regulatory compliance.

The Indian Space Policy 2023, a comprehensive and dynamic framework aimed at unlocking India’s potential in the space sector, serves as the guiding beacon for these policy reforms. Notably, the policy emphasizes enhancing private participation, augmenting space capabilities, fostering commercial presence in space, driving technology development, and nurturing international relations.

Prior to the amendment, FDI in the establishment and operation of satellites was permitted solely through the government approval route. However, in alignment with the Indian Space Policy 2023, the Cabinet has relaxed the FDI policy, prescribing liberalized thresholds for various sub-sectors and activities within the space domain.

The Department of Space, in consultation with key stakeholders including IN-SPACe, ISRO, NSIL, and industrial entities, has championed these reforms. The move is expected to catalyze growth within the sector, enabling indigenous companies to achieve sophistication in products, scale operations globally, and garner a larger share of the global space economy.

Under the amended FDI policy, 100% FDI is now permitted in the space sector, with liberalized entry routes aimed at attracting potential investors to Indian companies operating in this domain. The entry routes for various activities have been clearly defined, offering a roadmap for investment in areas such as satellites manufacturing and operation, launch vehicles, creation of spaceports, and manufacturing of space-related components and systems.

The increased private sector participation is anticipated to yield several benefits, including job creation, technology absorption, and self-reliance within the sector. Moreover, it is expected to integrate Indian companies into global value chains, thereby bolstering the ‘Make In India’ and ‘Atmanirbhar Bharat’ initiatives of the government.

In summary, the amendments in the FDI policy represent a significant stride towards unlocking the immense potential of India’s space sector, fostering innovation, and positioning the country as a key player in the global space economy.