Liberalised FDI limits are on the cards so that companies based in India can access the latest global technologies in a host of space-sector activities, including satellite manufacturing, satellite communications/operations and local production of satellite components, user devices and ground segment systems such as earth stations. Foreign direct investment up to 49% may also be permitted in satellite launch vehicle and associated system operations.
“We expect the new FDI policy for the space sector to be approved soon. For different space activities, foreign investment of 49% or 74% is likely to be permitted via the automatic route, and in most situations up to 100% through the government route will be permitted.” Pawan Goenka, chairman, space industry regulator Indian National Space Promotion and Authorisation Centre (IN-SPACe), told ET.
The new FDI rules for the space sector will soon be notified by the Department for Promotion of Industry & Internal Trade, which is working closely with IN-SPACe, the communications ministry and the Department of Space (DoS).
Easing of foreign ownership rules for the space services sector is likely to be on the lines of relaxations undertaken in the defence industry a few years ago, say senior industry executives. IN-SPACe is closely involved as it’s the sole single-window agency to authorise the gamut of space activities by both government and private satcom players. Unlike the telecom sector, the automatic FDI route option is not yet available to private satellite players. All FDI proposals, including relevant technical applications in the satellites space, have to now be cleared by the DoS. The expected easing of the space sector FDI policy comes at a time when the likes of Elon Musk’s Starlink, Jeff Bezos-led Amazon, Bharti Group-backed OneWeb, Canada’s Telesat and US-based Hughes are awaiting clarity from the Indian government on the new satcom service foreign ownership rules.Global satcom players have been eyeing the nascent satellite broadband services market opportunity in India, especially as EY estimates the country’s space economy to grow to $13 billion by 2025 from an annual revenue opportunity of around $1 billion now. Several Indian companies, including Reliance-backed Jio Platforms and Tata-backed Nelco are also looking to tap into this opportunity.
