Satellite-related activities under the space sector can get Foreign Direct Investment between 49-100 per cent as the Union Cabinet approved an amendment in FDI policy for the space sector on Wednesday.

According to a government statement, under the amended FDI policy, 100 per cent FDI is allowed in the space sector. Now, satellite manufacturing & operation, satellite data products and ground segment & user segment can get FDI up to 74 per cent under the automatic route, beyond which government route will be applicable. Sub-sector comprising launch Vehicles and associated systems or sub-systems, the Creation of Spaceports for launching and receiving Spacecraft can get FDI through automatic routes up to 49 per cent. Here, too, beyond 49 per cent, these activities are under government route. One hundred per cent FDI under automatic route has now been permitted to manufacture components and systems/sub-systems for satellites, ground segment and user segment.

To date, FDI is permitted to establish and operate satellites only through the government’s approval route. In line with the vision and strategy under the Indian Space Policy 2023, the Union Cabinet has eased the FDI policy on Space sector by prescribing liberalized FDI thresholds for various sub-sectors/activities “The liberalized entry routes under the amended policy are aimed to attract potential investors to invest in Indian companies in space,” it said while adding that this has been done to realize the vision of an Atmanirbhar Bharat as laid down by PM Shri Narendra Modi.

“The FDI policy reform will enhance Ease of Doing Business in the country, leading to greater FDI inflows and thereby contributing to the growth of investment, income and employment,” it said. The Indian Space Policy 2023 was cited as an overarching, composite, and dynamic framework to implement the vision for unlocking India’s potential in the space sector through enhanced private participation. The policy aims to augment space capabilities, develop a flourishing commercial presence in space, use space as a driver of technology development and derived benefits in allied areas, pursue international relations, and create an ecosystem for effectively implementing space applications among all stakeholders.

“The proposed reforms seek to liberalize the FDI policy provisions in the space sector by prescribing liberalized entry route and providing clarity for FDI in Satellites, Launch Vehicles and associated systems or sub-systems, Creation of Spaceports for launching and receiving Spacecraft and manufacturing of space-related components and systems,” the statement said.

Department of Space consulted with internal stakeholders like IN-SPACe, ISRO, NSIL, and several industrial stakeholders. NGEs have developed capabilities and expertise in satellites and launch vehicles. With increased investment, they could achieve sophistication of products, global scale of operations and enhanced share of the global space economy.

“This increased private sector participation would help to generate employment, enable modern technology absorption and make the sector self-reliant. It is expected to integrate Indian companies into global value chains. With this, companies will be able to set up their manufacturing facilities within the country duly encouraging ‘Make In India (MII) ‘and ‘Atmanirbhar Bharat’ initiatives of the Government,” the statement said.

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