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| Revamped FDI Guidelines Boost India Space Sector Investment |
In a significant stride towards bolstering foreign investment in India's burgeoning space sector, the government has recently enacted amended Foreign Direct Investment (FDI) regulations. These revisions aim to streamline and facilitate overseas investment, particularly in key areas such as satellite manufacturing, operations, launch vehicles, and associated systems.
Under the amended guidelines, foreign investors are now permitted up to 100 percent ownership in manufacturing components for satellites, 74 percent in satellite manufacturing and operations, and 49 percent in launch vehicles. Any investment exceeding these thresholds will necessitate government approval.
These amendments are incorporated within the framework of the Consolidated FDI Policy Circular of 2020, specifically under Para 5.2.12. The policy delineates sectoral caps and entry routes for various activities within the space sector, ensuring clarity and coherence in investment regulations.
Key highlights of the revised policy include:
Satellites – Manufacturing & Operation:
- Sectoral Cap: 100%
- Up to 74%: Automatic route
- Beyond 74%: Government route
Satellite Data Products:
- Sectoral Cap: 100%
- Up to 74%: Automatic route
- Beyond 74%: Government route
Ground Segment & User Segment:
- Sectoral Cap: 100%
- Up to 74%: Automatic route
- Beyond 74%: Government route
Launch Vehicles and Associated Systems or Subsystems:
- Sectoral Cap: 100%
- Up to 49%: Automatic route
- Beyond 49%: Government route
Creation of Spaceports for Launching and Receiving Spacecraft:
- Sectoral Cap: 100%
- Up to 49%: Automatic route
- Beyond 49%: Government route
Manufacturing of Components and Systems/Subsystems for Satellites, Ground Segment, and User Segment:
- Sectoral Cap: 100%
- Up to 100%: Automatic route
Furthermore, the amended policy stipulates that the investee entity shall adhere to sectoral guidelines issued by the Department of Space.
This regulatory overhaul is underpinned by the imperative to invigorate foreign investment in India's space sector, which has witnessed a tepid inflow over the past two years. By easing FDI norms, the government endeavors to catalyze technological advancements, foster innovation, and propel the growth trajectory of the Indian space industry.