Govt eases FDI norms in space sector

New FDI norms in space sector to attract overseas players, boost manufacturing, and integrate Indian companies globally.

The Government on February 21 eased Foreign Direct Investment (FDI) norms in the space sector in a bid to attract overseas players and private companies into the segment. The decision was taken at the Cabinet meeting chaired by Prime Minister Narendra Modi.

Now, the satellite sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector, according to an official statement. Presently, FDI in the space sector is allowed up to 100% in the area of satellite establishment and operations through government route only.

By changing the current policy, the Government has allowed up to 74% FDI under automatic routes in satellite manufacturing and operation, satellite data products, and ground and user segments. Beyond this limit, Government approval will be required in these areas for FDI, it said.

Up to 49% FDI is allowed through the automatic route for launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft. Beyond 49%, FDI in these activities would require government approval, it added.

Further, up to 100% overseas investments are permitted under automatic route for manufacturing of components and systems/sub-systems for satellites, ground and user segments.

This 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.

Through the decision, the Government seeks to liberalise the FDI policy provisions in the space sector by prescribing easy entry routes and providing clarity for overseas investments 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.