Govt reviews FDI policy on space sector

07 Mar 2024

Govt reviews FDI policy on space sector

The Government of India has amended the extant Foreign Direct Investment (FDI) policy in order to open up the on space sector for overseas investors. The changes have been incorporated in the Consolidated FDI Policy.

Accordingly, the government has allowed foreign direct investment of up to 74 per cent through the automatic route and up to 100 per cent through the government route in the manufacture and operation of satellites.

FDI of up to 49 per cent will be allowed in the areas of satellite data products, ground and user segment, launch vehicles and associated systems or subsystems and up to 100 per cen5t via the government route.

The amended policy provides for up to 100 per cent foreign investment in areas such as creation of spaceports for launching and receiving spacecraft. This will be applicable to manufacturing of components and systems/ sub-systems for satellites, ground segment and user segment.

However, the investor will be subject to sectoral guidelines as issued by the Department of Space from time to time.

FDI policy on space defines satellite manufacturing and operation as an end-to-end activity that includes manufacture and supply of satellite, payload, satellite systems (including control of in-orbit operations).

Satellite data products include reception, generation and dissemination of earth observation/remote sensing satellite data and data products (including application interfaces).

Ground segment includes satellite earth stations, gateway, teleports, satellite telemetry, tracking and command station, control centre etc.

User segment includes ground terminals for communicating with the satellite, which are not covered under the ground segment.

Launch vehicles are defined as a vehicle and its stages or components that are designed to operate in or place spacecraft with payloads or persons, in a suborbital trajectory, earth orbit or outer space.

Spaceport or a launch site is the base for launching spacecraft, and consist of facilities like equipment for transportation.

Components and systems/subsystems for satellites and ground segment include electrical, electronic and mechanical components.

 The changes in the FDI policy will take effect from the date of FEMA notification, according to the government release.


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