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Govt eases FDI norms in space sector

Feb 21, 2024

The government on Wednesday eased Foreign Direct Investment (FDI) norms in the space sector with an aim to attract overseas players and private companies into the segment. The decision was taken at the Cabinet meeting chaired by Prime Minister Narendra Modi.

To enhance ease of doing business and attract investments, the government on Wednesday eased foreign direct investment (FDI) norms in the space sector and divided the satellite sub-sector into three different activities with defined limits for foreign investment in each such sector.

“This will encourage foreign investment in the country and Make in India,” I&B minister Anurag Thakur said.

At present, FDI in the space sector is allowed up to 100% in the area of satellite establishment and operations through government route only.

As per the amended FDI policy approved by the Union Cabinet, India has now allowed upto 74% FDI under automatic route in satellites-manufacturing and operation, satellite data products and ground and user segments. Beyond this limit, government approval will be required in these areas for FDI.

Upto 49% FDI is allowed through automatic route for launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft. Beyond 49%, FDI in these activities would require government approval.

Further upto 100% overseas investments are permitted under automatic route for manufacturing of components and systems/ sub-systems for satellites, ground and user segments.

“In line with the vision and strategy under the Indian Space Policy 2023, the Union Cabinet has eased the FDI policy on Space sector by prescribing liberalized FDI thresholds for various sub-sectors/activities,” the government said in a statement, adding that the Department of Space consulted with internal stakeholders like IN-SPACe, ISRO and NSIL as well as several industrial stakeholders.

This increased private sector participation would help to generate employment, enable modern technology absorption and make the sector self-reliant.

It is expected to integrate Indian companies into global value chains and companies will be able to set up their manufacturing facilities

Through the decision, the government seeks to liberalize the FDI policy provisions in the space sector by prescribing easy entry routes and providing clarity for overseas investments in satellites, launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft and manufacturing of space related components and systems.

[The Economic Times]

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