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With an aim to attract offshore investors in satellite manufacturing and satellite launch vehicles segments, the government has amended the foreign direct investment (FDI) policy in the space sector. The notification comes days ahead of the scheduled visit of Tesla CEO Elon Musk who is expected to meet with various Indian space companies during his visit from April 21 to 22, 2024. 

The new rules, known as the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024, provide a liberalized entry route for FDI in satellites, launch vehicles, spaceports, and manufacturing space-related components and systems. As per the notification, up to 74 per cent FDI for satellite manufacturing & operation, satellite data products and ground segment & user segment are allowed under automatic route. Beyond 74 per cent these activities are under government route.

Further, FDI up to 49 per cent is allowed for Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft are under automatic route but beyond 49 per cent government permission would be required. Besides, 100 per cent FDI allowed for manufacturing of components and systems/ sub-systems for satellites, ground segment and user segment without government permission.