Foreign Investment In Space Sector – Inward/ Foreign Investment

The Department for Promotion of Industry and Internal Trade,
Ministry of Commerce and Industry, Government of India has revised
the terms governing foreign direct investment
(“FDI“) policy of 2020
(“FDI Policy“) for the space sector in
India, vide Press Note no. 1 (2024 Series) dated 4 March 2024
(“Press Note“).

SUMMARY AND BACKGROUND OF THE AMENDMENT

1. Initially, para 5.2.12 of the FDI Policy allowed 100% of FDI
under the government approval route solely for satellite
establishment and operations, subject to the sectoral guidelines of
Department of Space/ Indian Space Research Organisation (ISRO).

2. With an aim to streamline investment procedures in India and
emphasizing various facets of the space sector, the Press Note has
amended para 5.2.12 of the FDI Policy to align with the objectives
set forth in the Indian Space Policy 2023 by segregating the space
sector into different sub-categories as follows:

3. In view of the sub division of the sector the Press Note has
added the following definitions to provide more clarity:

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: 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.




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




5. 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.




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




7. Manufacturing of components and systems/sub-systems for
   satellites, ground segment and user segment: Comprises of
   manufacturing and supply of the electrical, electronic, and
   mechanical components systems/ subsystems for satellites, ground
   segment and user segment.

4. Any investee entity is subject to sectoral guidelines issued
by the Department of Space.

CONCLUSION

In recent years, the Indian space sector has been progress by
leaps and bounds which is evidence of the Government of India’s
confidence in the growth of the sector.

By introducing this Press Note the Government of India has
introduced sectoral caps and entry routes in the space sector,
thereby liberalising the certain aspects of the space sector. This
will help easy access to foreign investment and technology, boost
manufacturing and promote commercial ventures and strengthen global
relations.

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