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Centre announces 100% Foreign Direct Investment in Space sector, move expected to attract potential investors to Indian space companies

The Union Cabinet approved the amendment in the FDI policy on the space sector dividing the satellites sub-sector into three different activities with defined limits for foreign investment in each such sector.

In a significant move, the Modi government has announced 100% Foreign Direct Investment (FDI) in the space sector. This decision was announced following a key meeting chaired by PM Modi on Thursday (21st February).

The move is aimed at attracting potential investors to invest in Indian companies in the space sector and integrate Indian companies into global value chains further providing an impetus to ‘Make In India (MII)’ and ‘Atmanirbhar Bharat’ initiatives.

The Union Cabinet approved the amendment in the FDI policy on the space sector dividing the satellites sub-sector into three different activities with defined limits for foreign investment in each such sector.

The Centre stated that the proposed reforms will liberalize the FDI policy provisions in the space sector by prescribing liberalized entry routes and providing clarity for FDI in Satellites, Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft and manufacturing of space-related components and systems.

“The Indian Space Policy 2023 was notified 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 said 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 effective implementation of space applications among all stakeholders,” the Centre stated.

It added that as per the existing FDI policy, FDI is permitted in the establishment and operation of Satellites through the Government approval route only.

“Now, in line with the vision and strategy under the Indian Space Policy 2023, the Union Cabinet has eased the FDI policy on the Space sector by prescribing liberalized FDI thresholds for various sub-sectors/activities,” the government announced.

The Centre said that the increased private sector participation would help to generate employment, enable modern technology absorption and make the sector self-reliant.

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