Center announces relaxed FDI guidelines for the space industry

In an effort to draw offshore investors to the satellite manufacturing and satellite launch vehicle sectors, the government has announced changes to the foreign direct investment policy in the space industry.

A gazette notification dated April 16, 2024, amended the FDI policy for the space sector. It clarifies the liberalized entry route and allows FDI in satellites, launch vehicles, and related systems or subsystems, as well as in spaceport construction for the launching and receiving of spacecraft and the manufacturing of space-related systems and components.

These revisions were approved earlier this year by the Union Cabinet. The announcement was made a few days before Elon Musk, the CEO of Tesla, was supposed to visit India on April 21 and 22. During his tour, Musk is anticipated to meet with a number of Indian space firms. At the same time, Starlink, Musk’s satellite internet project, is getting closer to final clearance.

According to the announcement, up to 74% FDI is permitted under the automated route for satellite data products, ground segment, and user segment as well as satellite production and operation. More than 74% of these activities are governed by the government.

Getting Capital

Up to 74% FDI is permitted under automated route for satellite data products, ground segment, and satellite production and operation.
Up to 49% of FDI is allowed for launch vehicles, and spaceports may be built to receive and launch spacecraft automatically.
Furthermore, 100% FDI permitted the production of satellite systems and components without official government approval.