The government has notified enhanced foreign direct investment (FDI) limits for satellite-related activities under the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024.
According to the gazette notification, new rules based on the Union Cabinet decision in February 2024 on the relaxed FDI caps, have come into effect from April 16, 2024.
As per the notification by the ministry of finance, amendment made in the FDI policy for space sector prescribes liberalised 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. The liberalised entry routes under the amended policy are aimed at attracting potential investors in the Indian companies in space.
As per the new rules, up to 100 per cent FDI is allowed in the space sector. However, up to 74 per cent FDI is permitted under the automatic route in satellite manufacturing and operation, satellite data products and ground and user segment. Beyond 74 per cent, FDI in these activities requires government approval.
Meanwhile, up to 49 per cent FDI is allowed under the automatic route in the launch vehicles and associated systems or subsystems, and in the creation of spaceports for launching and receiving spacecraft. Beyond this limit, government approval is needed. In addition, up to 100 per cent FDI under the automatic route is allowed in the manufacturing of components and systems or sub-systems for satellites and the ground and user segments.
