NEWS – The Union Cabinet on Wednesday further liberalised the space sector by amending the Foreign Direct Investment norms, permitting an increased flow of foreign capital in areas related to the development and launch of satellites, and creating the ground infrastructure for the same

HIGHLIGHTS

• As per the amended policy, 100% of FDI under automatic route is permitted for the making of components and systems/sub-systems for satellites, ground segment and user segment, while 74% FDI will be allowed for satellites-manufacturing and operation, satellite data products and ground segment and user segment
• For the development of launch vehicles and associated systems/subsystems, and the creation of spaceports, the FDI limit under the automatic route has been fixed at 49%
• The amendments will increase private sector participation, which in turn will generate employment, enable modern technology absorption and make the sector self-reliant. It is expected to integrate Indian companies into global value chains
• The amendments will also allow private companies to set up manufacturing facilities in the country
• Following the liberalisation of the space sector, India eyes a $40 billion space economy by 2040
• The number of start-ups in the space sector has gone up to more than 150 with some of them developing rockets and satellites with some hand-holding by the Indian Space Research Organisation
• The changes in the FDI norms come a year after the government notified a new space policy in 2023 in an effort to increase private participation in the space sector benefiting the economy
• The non-governmental entities have developed capabilities and expertise in the areas of satellites and launch vehicles. With increased investment, they would be able to achieve sophistication of products, global scale of operations and enhanced share of global space economy