The government has notified amendments to the foreign direct investment policy in the space sector to attract offshore investors in satellite manufacturing and satellite launch vehicles segments.

Amendment made in the FDI policy for space sector through a gazette notification dated April 16, 2024, prescribes liberalized entry route and provides clarity for FDI in satellites, launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving Spacecraft and manufacturing of space-related components and systems, PTI reported yesterday from New Delhi.

“These rules may be called the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024,” the gazette notification said.

Meanwhile, according to a government statement, the Union Cabinet approved the amendment in FDI policy for the space sector on February 21.

The Indian Space Policy 2023 was notified as an overarching, composite and dynamic framework to implement the vision for unlocking India’s potential in the space sector through enhanced private participation.

The said 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 and pursue international relations, amongst other goals.

Under the amended policy now notified, for example, 100 percent FDI is allowed in the space sector. The liberalized entry routes under the amended policy are aimed to attract potential investors to invest in Indian companies in space.

Then, again, up to 74 percent is allowed under automatic route in satellite manufacturing & operation, satellite data products and ground segment and user segment. Beyond 74 percent foreign investments in these activities will have to be cleared by the government.

The government feels that with these liberalised norms, private sector companies will be able to set up their manufacturing facilities within the country that will encourage ‘Make In India’.

The notification comes days ahead of the India visit of SpaceX and Tesla boss Elon Musk, who’s scheduled to meet the Indian Prime Minister Narendra Modi Monday next.