Foreign Direct Investment (FDI) in the space sector in India is not 100 per cent blanket approval and has been split into three stages to comply with military requirements, said industry veteran JD Patil, founder chairperson of Indian Space Association (ISpA), and a board member of regulatory body Indian National Space Promotion & Authorisation Centre (IN-SPACe).

Welcoming the FDI policy reform cleared by the Union Cabinet on Wednesday night, Patil, exclusively told businessline that the liberalisation process in the space domain was long overdue and should have happened two decades ago when the US did so to get the early advantage. Regardless of that, he was confident that India will be able to achieve its milestones faster, maybe in 10 to 15 years, due to its innovation skills and an existing ecosystem due to the presence of the Indian Space Research Organisation (ISRO).

Patil, a Member of the Executive Council of Management of L&T and Advisor to the CEO & MD for L&T’s Defence & New Age Smart Technology businesses, was part of the consultation process of the government to amend the FDI policy by virtue of the positions he holds in the key space organisations.

“This FDI is not a 100 per cent blanket... There are three clear stages in case of FDI. Satellite operations were always available under 100 per cent FDI. What the government has done is to continue with 100 per cent FDI for satellite operations, though permission will have to be taken if data about the country has to be used. The second tier of this FDI is about 74 per cent, and the third tier is about 49 per cent under the automatic group,” he said, describing space as the next sunrise sector.

This is important because there are certain areas in the space sector like launch vehicle manufacturing, which is as good as an ICBM (Intercontinental Ballistic Missile). That is why FDI in this segment of space cannot be different from something similar in military. For that, it’s 49 per cent and for ground systems it is 74 per cent under the automatic route and 100 per cent under the government route, Patil explained about the logic behind the different stages enumerated in the latest policy.

“It’s a sector that trades between civil and military. So what is closer to the military must follow the military rule, and what is closer to civil must allow 100 per cent FDI. A balance has been achieved in the announcement on space sector,” Patil stated.

The government in 2020 had increased FDI from 49 to 74 per cent under automatic route and up to 100 per cent through the government route in the defence sector.

He was of the view that the Indian space economy will grow from $6-7 billion now to $43-45 billion by the end of this decade. According to Patil, 20 per cent of commerce happens for satellite building and remaining 80 per cent is all about data collection and dissemination. Not that the ISRO was not paying attention to 80 per cent of the job, but this quantum was quite small as the entire data was treated as secret restricting the possibility of doing commerce out of it, he remarked.

Patil also said that anumber of start-ups are coming up in the space sector. “Till 2020, there were less than 20 to 30 start-ups in space-related initiatives. Today, there are more than 200 start-ups. So in just four years, they have become ten times. This is what shows the ability of IT engineers and IT-enabled service providers,” he informed.

He said it will benefit armed forces since within next few years and the bulk of surveillance will shift from ground to space.

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