Space Sector FDI Norms: DPIIT Announces Changes

The Department for Promotion of Industry and Internal Trade (DPIIT) has notified the changes in the Foreign Direct Investment (FDI) policy on space sector, as approved by the Union Cabinet in February 2024. The changes are aimed at enhancing ease of doing business, attracting investments, and boosting the growth of the space industry in India.

The amended FDI policy has divided the space sector into four sub-sectors/activities with defined limits for foreign investment in each such sector. These are:

• Satellites-Manufacturing & Operation, Satellite Data Products, and Ground Segment & User Segment: Up to 74% FDI is allowed under automatic route, and beyond 74% under government route.
• Launch Vehicles and associated systems or subsystems: Up to 49% FDI is allowed under automatic route, and beyond 49% under government route.
• Creation of Spaceports for launching and receiving Spacecraft: Up to 49% FDI is allowed under automatic route, and beyond 49% under government route.
• Manufacturing of components and systems/sub-systems for satellites, ground segment and user segment: Up to 100% FDI is allowed under automatic route.

The investee entity shall be subject to sectoral guidelines as issued by Department of Space from time to time. The definitions of each sub-sector/activity are given in the Press Note No. 1 (2024 Series) issued by DPIIT.

The FDI policy reform is in line with the vision and strategy under the Indian Space Policy 2023, which was notified as an overarching, composite and dynamic framework to implement the vision for unlocking India’s potential in space sector through enhanced private participation. The policy aims to augment space capabilities; develop a flourishing commercial presence in space; use space as a driver of technology development and derived benefits in allied areas; pursue international relations and create an ecosystem for effective implementation of space applications among all stakeholders.

The liberalized FDI policy provisions are expected to attract potential investors to invest in Indian companies in space sector, which have developed capabilities and expertise in the areas of satellites and launch vehicles. With increased investment, they would be able to achieve sophistication of products, global scale of operations and enhanced share of global space economy.

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