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India eases process for FDI in space sector, allows 100 per cent in making satellite components

India has unveiled significant reforms in its space sector to attract foreign investment, allowing 100% FDI in satellite system manufacturing without approval and easing regulations for launch vehicles. These reforms are expected to stimulate economic growth, foster private sector participation.

Edited By: Nitin Kumar @Niitz1 New Delhi Published on: February 22, 2024 14:25 IST
FDI satellite
Image Source : REUTERS A rendering of a satellite that will be used to track methane emissions is shown in a handout from MethaneSAT.

In a significant move aimed at bolstering its position in the global space market, India has announced the easing of approval processes for foreign direct investment (FDI) in its space sector. The government revealed that 100% FDI will now be permitted in the manufacture of satellite systems without requiring official approval. Additionally, regulations governing launch vehicles have been relaxed, marking a pivotal step towards securing a larger share of the lucrative global space market.

Aiming for global dominance

India's space endeavors received a substantial boost following its successful lunar mission in August, where it became the first country to land a spacecraft near the unexplored south pole of the moon. This achievement, coupled with recent developments, underscored India's aspirations for space dominance and technological prowess.

Liberalised investment policies

Under the new policy framework, foreign companies can invest up to 100% in the manufacture of satellite components and systems without the need for approval. For satellite production in India, investments of up to 74% will not require government approval, while the threshold for investment in launch vehicles without approval stands at 49%.

Private sector participation

India has taken significant steps to privatise space launches, aiming for a substantial increase in its share of the global launch market. With projections suggesting the space market could reach $47.3 billion by 2032, India's revised FDI policies are poised to attract interest from major players such as Elon Musk's SpaceX and Jeff Bezos' Blue Origin.

Positive impact on economy

The government anticipated that these policy reforms would not only spur employment opportunities but also facilitate the establishment of manufacturing facilities within India. A.K. Bhatt, Director General of the Indian Space Association, hailed the move, emphasising its potential to provide India with access to cutting-edge technology and much-needed investment from both domestic and international sources.

Market response

The announcement has already made waves in the Indian stock market, with space-related stocks experiencing notable gains. Companies such as Paras Defence and Space Technologies, MTAR Technologies, Taneja Aerospace and Aviation, and Apollo Micro Systems witnessed a surge in their stock prices, reflecting investor optimism surrounding the liberalisation of India's space sector.

Also read | India to become world's third-largest economy by 2027, says Jefferies



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