Government Unveils FDI Norms for Space Sector, Eyes $44 Billion Inflows by 2033

Ira Singh
Khabar Khabaron Ki,07 Mar’24

New Delhi. The government has officially notified the Foreign Direct Investment (FDI) norms for the space sector in a significant development aimed at fostering growth and innovation in India’s space industry. This move is expected to attract substantial investment, with projections suggesting potential inflows of up to $44 billion by 2033.

The government on Tuesday notified the amended FDI norms in the space sector, clearing the deck for 100 per cent overseas investment in making components for satellites, 74 per cent in satellite manufacturing and operations, and 49 per cent in launch vehicles.

According to the report, the government is expected to treat satellite broadband as a telecom service, allowing companies like Eutelsat OneWeb, Starlink, Amazon Kuiper, and Telesat to be eligible for 100% foreign direct investment (FDI) through the automatic route. This move is expected to clarify foreign ownership rules for companies planning to launch broadband-from-space services in India and encourage top dollar inflows into the satcoms sector.

“Global satellite-based broadband providers, to the extent that they are only providing broadband services, and not falling within any other activities listed in the (space sector FDI) amendments, should fall under the 100% automatic investment route for telecom,” Anirudh Rastogi, managing partner at Ikigai Law, quoted as saying. He added, that Rastogi added that the latest amendments to the space sector FDI rules apply to the manufacture and operation of satellite systems, supply of ground/user segments and earth-observation data products. “Telecom services, even if provided by satellites, are not covered, and should come within the ambit of telecom FDI rules.”

Last month, the Cabinet had amended the space sector FDI rules. It also allowed up to 49% FDI under the automatic route for satellite launch vehicles and up to 100% FDI under the automatic route for manufacturing of satellite sector components and sub-systems.