The Indian Cabinet chaired by Prime Minister Narendra Modi has relaxed Foreign Direct Investment (FDI) norms in the country’s booming space sector, according to a government statement on Wednesday evening.
The new FDI rules, implemented under the framework of Indian Space Policy 2023, have created three different categories with a "defined limit" for foreign investment in each of them, it said.
A 100 percent FDI would be allowed under the "automatic route" in the manufacturing of components and systems/sub-systems for satellites, ground segment and user segment, the Cabinet statement said.
Secondly, the FDI ceiling in the satellite manufacturing and operations has also been increased to 74 percent under the new rules, it said.
Similarly, the government has increased the cap for foreign investments in development of launch vehicles and associated systems, the creation of spaceports used for launching and receiving aircrafts to 49 percent.
"Beyond 49 percent, these activities are under the government route," the Cabinet stated.
Announcing the new rules at a late evening press conference, Indian Information and Broadcasting Minister Anurag Thakur noted that the existing rules allowed manufacturing and operation of satellites by the private sector only with the express approval of the government.
“The Union Cabinet has eased the FDI policy on space sector by prescribing liberalised FDI thresholds for various sub-sectors and activities”, Thakur remarked.
New Delhi has expressed confidence that the increased private sector participation in the space sector would help to generate employment opportunities as well as as facilitate technology transfer from other companies to make the domestic space industry as "self-reliant".
"It is expected to integrate Indian companies into global value chains. With this, companies will be able to set up their manufacturing facilities within the country duly encouraging the Make In India (MII) and 'Atmanirbhar Bharat' (self-reliant India) initiatives of the government," the government said.