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India’s Updated FDI Policy for Space Sector – Press Note No. 1 (2024 Series)

Introduction: In a significant development, the Government of India, through the Ministry of Commerce & Industry’s Department for Promotion of Industry and Internal Trade, has released Press Note No. 1 (2024 Series). This press note outlines the review and amendments to the Foreign Direct Investment (FDI) Policy specifically focused on the Space Sector. The changes, detailed under Para 5.2.12 of the Consolidated FDI Policy Circular of 2020, signify a strategic move to enhance investment opportunities and participation in India’s burgeoning space industry.

Detailed Analysis: The updated FDI policy introduces crucial amendments to the Space Sector, emphasizing various facets, including sectoral caps and entry routes. Key highlights include:

5.2.12 SPACE SECTOR

5.2.12.1 Satellites-Manufacturing & Operation:

  • Sectoral Cap: 100%
  • Entry Route: Up to 74% – Automatic; Beyond 74% – Government route

5.2.12.2 Launch Vehicles and associated systems or subsystems:

  • Sectoral Cap: 100%
  • Entry Route: Up to 49% – Automatic; Beyond 49% – Government route

5.2.12.3 Manufacturing of components and systems/sub-systems for satellites, ground segment and user segment:

  • Sectoral Cap: 100%
  • Entry Route: Up to 100% – Automatic

The investee entity is subject to sectoral guidelines issued by the Department of Space. Definitions for various components like Satellites, Satellite Data Products, Ground Segment & User Segment, Launch Vehicles, and Spaceports are explicitly provided, bringing clarity to potential investors.

Conclusion: The Press Note No. 1 (2024 Series) heralds a new era for Foreign Direct Investment in India’s Space Sector. The amendments, effective from the date of FEMA notification, relax sectoral caps and entry routes, making it more accessible for foreign investors. The move reflects the government’s commitment to fostering innovation, technology, and international collaboration in the space domain.

Investors and stakeholders in the space industry are encouraged to carefully review the updated FDI policy to leverage the expanded opportunities. As India continues to make strides in space exploration and satellite technology, these policy changes aim to attract significant investments, fueling growth and advancement in the country’s space capabilities. The Press Note serves as a comprehensive guide for potential investors, offering transparency and clarity in navigating the revised FDI regulations in the Space Sector.

Read Press Release: Review of Foreign Direct Investment Policy on Space Sector

***

Government of India
Ministry of Commerce & Industry
Department for Promotion of Industry and Internal Trade
FDI Policy Section

***

Press Note No. 1 (2024 Series)

Subject: Review of Foreign Direct Investment (FDI) Policy on Space Sector

The Government of India has reviewed the extant FDI policy on Space sector. Accordingly, the following amendments have been made under Para 5.2.12 of the Consolidated FDI Policy Circular of 2020, as amended from time to time (FDI Policy):

5.2.12 SPACE SECTOR

Sector/Activity

Sectoral
Cap
Entry Route
5.2.12.1

(1) Satellites-Manufacturing & Operation

100% Up to 74%: Automatic

Beyond 74%: Government route

(2) Satellite Data Products
(3) Ground Segment & User Segment
5.2.12.2

(1) Launch Vehicles and associated systems or subsystems

100% Up to 49%: Automatic

Beyond 49%: Government route

(2) Creation of Spaceports for launching and receiving Spacecraft
5.2.12.3

Manufacturing   of   components    and systems / sub-systems    for  satellites, ground segment and user segment

1000/o Up to 100%: Automatic

5.2.12.4 The investee entity shall be subject to sectoral guidelines as issued by Department of Space from time to time.

5.2.12.5 Definitions:

(1) Satellites — Manufacturing & Operation: End-to-end manufacturing and supply of satellite and/or payload, establishing the satellite systems including control of in-orbit operations of the satellite & payloads.

(2) Satellite Data Products: Reception, generation or dissemination of earth observation/remote sensing satellite data and data products including Application Interfaces (API).

(3) Ground Segment & User Segment:

(a) Ground Segment: Supply of satellite transmit/receive earth stations including earth observation data receive station, gateway. teleports. satellite Telemetry, Tracking and Command (TIC) station, Satellite Control Centre (SCC) etc.

(b) User Segment: Supply of user ground terminals for communicating with the satellite, which are not covered under the ground segment.

(4) Launch Vehicles and Associated Systems or Subsystems: A vehicle and its stages or components that is designed to operate in or place spacecraft with payloads or persons, in a suborbital trajectory, earth orbit or outer space.

(5) Creation of Spaceports for launching and receiving Spacecraft:- A spaceport (also referred as launch site) can be regarded as the base from which spacecraft are launched, and consisting of facilities involving devices for transportation to. from and via outer space.

(6) Manufacturing of Components and Systems/Subsystems for Satellites ground segment and user segment: Comprises the manufacturing and supply of the electrical, electronic and mechanical components systems/ subsystems for satellites, ground segment and user segment.

3. The above decision will take effect from the date of FEMA notification.

(Hima Pande)
Joint Secretary to the Government of India

DPIIT File No.: P-15019/2/2023-FDI Policy dated 04/03/2024

Copy forwarded to:

1. Press Information Officer, Press Information Bureau- for giving wide publicity to the above Press Note.

Press Information Bureau

4. NIC Section in the Department for Promotion of Industry and Internal Trade – for uploading the Press Note on DPIIT’s website.

5. Hindi Section, DPIIT- for providing Hindi version.

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