The Indian government has recently introduced amendments to the foreign direct investment (FDI) policy in the space sector, aiming to attract offshore investors in satellite manufacturing and satellite launch vehicles segments. These amendments, detailed in a gazette notification dated April 16, 2024, have established a more liberalized entry route and provided clarity regarding FDI in satellites, launch vehicles, associated systems or subsystems, spaceports for spacecraft launching and receiving, and manufacturing of space-related components and systems.

The amendments, officially termed as the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024, were approved by the Union Cabinet earlier this year. The updated policy features liberalized entry routes designed to entice potential investors to engage with Indian companies in the space sector. Notably, these changes come just before the scheduled visit of Tesla CEO Elon Musk, expected to interact with various Indian space companies during his stay from April 21 to 22. This visit coincides with the final stages of approvals for Musk's satellite internet project, Starlink.

Under the amended policy, automatic routes for FDI allow up to 74% investment in satellite manufacturing and operation, satellite data products, ground segment, and user segment. Investments beyond this threshold, however, require government approval. Similarly, FDI up to 49% is permitted for launch vehicles and associated systems or subsystems, as well as the creation of spaceports, under the automatic route. Investments exceeding 49% in these areas also necessitate government permission.

A notable change is the allowance of 100?I for manufacturing components, systems, and sub-systems for satellites, ground segments, and user segment without needing government approval. Previously, FDI in satellite establishment and operation required government approval.

These amendments align with the vision and strategy outlined in the Indian Space Policy 2023, which aims to foster growth and innovation in the space sector. The Department of Space collaborated with key stakeholders such as IN-SPACe, ISRO, NSIL, and various industrial entities to formulate these progressive changes. Non-governmental entities (NGEs) have demonstrated capabilities and expertise in satellite and launch vehicle domains. With increased investment opportunities, they can enhance product sophistication, expand global operations, and secure a larger share of the global space economy.

These amendments signal India's commitment to attracting foreign investment, fostering innovation, and positioning itself as a key player in the rapidly evolving global space industry.

The Indian government has recently introduced amendments to the foreign direct investment (FDI) policy in the space sector, aiming to attract offshore investors in satellite manufacturing and satellite launch vehicles segments. These amendments, detailed in a gazette notification dated April 16, 2024, have established a more liberalized entry route and provided clarity regarding FDI in satellites, launch vehicles, associated systems or subsystems, spaceports for spacecraft launching and receiving, and manufacturing of space-related components and systems.

The amendments, officially termed as the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024, were approved by the Union Cabinet earlier this year. The updated policy features liberalized entry routes designed to entice potential investors to engage with Indian companies in the space sector. Notably, these changes come just before the scheduled visit of Tesla CEO Elon Musk, expected to interact with various Indian space companies during his stay from April 21 to 22. This visit coincides with the final stages of approvals for Musk's satellite internet project, Starlink.

Under the amended policy, automatic routes for FDI allow up to 74% investment in satellite manufacturing and operation, satellite data products, ground segment, and user segment. Investments beyond this threshold, however, require government approval. Similarly, FDI up to 49% is permitted for launch vehicles and associated systems or subsystems, as well as the creation of spaceports, under the automatic route. Investments exceeding 49% in these areas also necessitate government permission.

A notable change is the allowance of 100?I for manufacturing components, systems, and sub-systems for satellites, ground segments, and user segment without needing government approval. Previously, FDI in satellite establishment and operation required government approval.

These amendments align with the vision and strategy outlined in the Indian Space Policy 2023, which aims to foster growth and innovation in the space sector. The Department of Space collaborated with key stakeholders such as IN-SPACe, ISRO, NSIL, and various industrial entities to formulate these progressive changes. Non-governmental entities (NGEs) have demonstrated capabilities and expertise in satellite and launch vehicle domains. With increased investment opportunities, they can enhance product sophistication, expand global operations, and secure a larger share of the global space economy.

These amendments signal India's commitment to attracting foreign investment, fostering innovation, and positioning itself as a key player in the rapidly evolving global space industry.