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Introduction: The Ministry of Commerce & Industry has unveiled significant changes to the Foreign Direct Investment (FDI) Policy in the space sector. This review, effective from the date of FEMA notification, brings crucial amendments to boost investments in various space-related activities. Let’s delve into the details of these modifications.

Detailed Analysis

5.2.12 SPACE SECTOR

1. Satellites – Manufacturing & Operation

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

2. Satellite Data Products

  • No changes in sectoral cap or entry route.

3. Ground Segment & User Segment

  • No changes in sectoral cap or entry route.

4. Launch Vehicles and Associated Systems or Subsystems

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

5. Creation of Spaceports for Launching and Receiving Spacecraft

  • No changes in sectoral cap or entry route.

6. Manufacturing of Components and Systems/Subsystems

  • Sectoral Cap: 100%
  • Entry Route: Automatic

Additional Points

  • Investee entities must adhere to sectoral guidelines issued by the Department of Space.
  • Definitions provided for Satellites, Satellite Data Products, Ground Segment & User Segment, Launch Vehicles, Spaceports, and Manufacturing of Components.

Conclusion: The revised FDI Policy unlocks new opportunities in India’s space sector, offering higher caps and more automatic routes for investors. By providing clarity on definitions and guidelines, the government aims to attract investments and propel the growth of the space industry. Keep an eye on further developments and leverage these changes for strategic investments.

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

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Ministry of Commerce & Industry

Review of Foreign Direct Investment Policy on Space Sector

Posted On: 05 MAR 2024 12:06PM by PIB Delhi

The Government of India has reviewed the extant Foreign Direct Investment (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

100% 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 (TTC) 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.

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

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