Cabinet gives go-ahead for up to 100 per cent FDI in space sector

The Union Cabinet on Wednesday, 21 February approved the amendment in the Foreign Direct Investment (FDI) policy for the space sector to allow up to 100 per cent FDI in the space sector.

The satellites sub-sector has been divided into three different activities -- launch vehicles, satellites and satellite components.

Under the amended policy, up to 49 per cent FDI is allowed in launch vehicles, 74 per cent in satellites, and 100 per cent in satellite components.

The activities defined under 'Launch Vehicles' are associated systems or subsystems; and creation of spaceports for launching and receiving spacecraft.

Similarly, the activities under 'Satellites' are manufacturing and operation; satellite data products; and ground segment and user segment.

As per the existing 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 Cabinet has eased the FDI policy on the space sector by prescribing liberalized FDI thresholds for various sub-sectors/activities, according to an official statement issued after the Cabinet meeting.

According to the statement, the liberalised entry routes under the amended policy are aimed at attracting potential investors to invest in Indian companies in space.

The 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, the statement noted.

"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," it added.