Government reviews Foreign Direct Investment policy on space sector
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In a significant move, the government has reviewed the extant Foreign Direct Investment (FDI) policy on the space sector. According to the government, the amendments, made under the Consolidated FDI Policy Circular of 2020, aim to liberalize and streamline FDI regulations to attract more investment and foster growth in the space industry. Under the revised policy, some changes have been introduced. Satellites: Manufacturing and Operation- The sectoral cap for FDI has been set at 100 per cent. For investments up to 74 per cent, automatic approval will be granted, while investments beyond 74 per cent will require government approval.
Satellite Data Products, Ground Segment and User Segment- The sectoral cap for FDI remains at 100 per cent, with automatic approval for investments up to 100 per cent. Launch Vehicles and Associated Systems or Subsystems- The sectoral cap for FDI has been set at 100 per cent, with automatic approval for investments up to 49 per cent. Investments beyond 49 per cent will require government approval.
Creation of Spaceports for Launching and Receiving Spacecraft- This category has been introduced, allowing 100 per cent FDI with automatic approval for investments up to 100 per cent. Manufacturing of Components and Systems/Subsystems for Satellites, Ground Segment, and User Segment- The sectoral cap for FDI remains at 100 per cent, with automatic approval for investments up to 100 per cent.
The amended policy provides clear definitions for various activities within the space sector, including satellites manufacturing and operation, satellite data products, ground segment, user segment, launch vehicles, creation of spaceports, and manufacturing of components and systems/subsystems, read the press release. These amendments are expected to streamline FDI regulations and attract more investment into India's burgeoning space industry.
The liberalization of FDI policy is in line with the government's vision to promote ease of doing business and facilitate greater participation of foreign investors in key sectors of the economy. The revised policy will come into effect from the date of Foreign Exchange Management Act (FEMA) notification, signaling a new era of opportunities and growth in India's space sector, read the press release.
