Bengaluru: The Union cabinet has approved a move to liberalise the governmentâs Foreign Direct Investment (FDI) policy in the space sector. Now, the satellite sub-sector has been divided into three categories, each with a threshold up to which FDI is automatically allowed without the need for government approval.
According to a government press statement, the policy amendment will allow 100 percent FDI in the manufacturing of satellite components and systems automatically, without the need for government approval. Up to 74 percent FDI will also be allowed automatically in satellite manufacturing and operational activities and up to 49 per cent in launch vehicles and spaceports.Â
For the latter two, FDI beyond these levels would still require government approval.
Under the existing FDI policy, up to 100 percent FDI is allowed in the satellite operations sector but only when approved by the central government.Â
The amendment will relax entry restrictions for foreign investment, and also allow it to be directed towards satellites, launch vehicles, and any of their associated systems or subsystems, as well as towards the creation of spaceports or private launch pads, and space-related component manufacturing.Â
Space start-ups welcomed the amendment with great enthusiasm.
Posting on their public social media accounts, Pawan K. Chandana, co-founder of Hyderabad-based Skyroot Aerospace, described it as a âbig boost for the aerospace sectorâ, while Prateep Basu, co-founder of online space marketplace SatSure, called it a âlong-pending reformâ.Â
The industry association of satellites, the Indian Space Association (ISpA) described it as a âforward-looking decisionâ that would help the growth of the private space industry in India.Â
The Indian private space sector has seen a boom in growth and support after the establishment of the agency IN-SPACe in 2020. This has acted as an effective and independent agency for knowledge transfer and resources support from ISRO for smaller private companies.Â
This saw the launches of Indiaâs first private rockets and 3D printed rockets, and the establishment of Indiaâs first private spaceport within ISROâs Sriharikota campus.Â
The press statement puts the new amendment in the context of the Indian Space Policy of 2023, which was implemented as a framework to expedite the private sectorâs growth. The statement described it as âoverarchingâ, with the aim of augmenting space capabilities.Â
It also seeks to âdevelop 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 stakeholdersâ.
(Edited by Rohan Manoj)
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