Cabinet Approves Amendment in the FDI Policy in Space Sector

A recent press release disseminated by the Ministry of Commerce & Industry on 21^st February 2024, is a significant step and might turn out to be a game changer for the Indian Space sector.

To realize the vision of an Atmanirbhar Bharat, the Space sector has been liberalized for Foreign Direct Investment (“FDI”) in prescribed sub-sectors/activities. Now, the satellites sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector.

As per the existing FDI policy, FDI is permitted in 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 on Space sector by prescribing liberalized FDI thresholds for various sub-sectors/activities.

• The entry route for the various activities under the amended FDI policy are as follows:
• Upto 74% FDI under Automatic route: Satellites-Manufacturing & Operation, Satellite Data Products and Ground Segment & User Segment. Beyond 74% these activities are under government route.
• Upto 49% FDI under Automatic route: Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft. Beyond 49% these activities are under government route.
• Upto 100% FDI under Automatic route: Manufacturing of components and systems/ sub-systems for satellites, ground segment and user segment.

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