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100% FDI Authorised in Satellite Part Making

100% FDI Authorised in Satellite Part Making

By: Geetanjali

The Union Cabinet on february 21, 2024 gives a nod to liberalise foreign investment in the satellite component making industry. To attract foreign investors in India to promote Vision of “AtmaNirbar Bharat” cabinet has allowed 100% FDI (Foreign Direct Investment) inflow in satellite part making.

Foreign Direct Investment refers to buying of shares by a foreign company in an organisation. For example: X company (from U.S.A) buys shares of Z company registered and based in India.

With this amendment in FDI in the space sector, the satellite sub-sector has been separated into three sectors, with a definite limit in FDI allowed as per the sector.

According to policy before amendment, FDI in manufacturing and operations, was approved through government approved methods only. Now, the government has allowed 74 % FDI directly in the satellite manufacturing and operations, satellite data products and ground and user segment, above 74% investment, investors will be required to take government approval.

For launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft FDI up to 49% is allowed, beyond that government approval will be required. However in the manufacturing of components and systems/sub-system for satellites, ground and user segment 100% FDI is permitted under the automatic route.

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