Union Cabinet approves 100% FDI in space sector
- Recently, the Union Cabinet approved amendments to the existing Foreign Direct Investment (FDI) policy, particularly in the space sector.
The Amendments
- The amended policy allows 100% FDI in the space sector to attract potential investors to invest in Indian companies in space.
- The amended policy extends the facility of
- Up to 74% FDI under automatic route for satellite manufacturing and operation, satellite data products, and ground/user segment.
- Up to 49% FDI under automatic route for launch vehicles and associated systems/subsystems, and creation of spaceports.
- Up to 100% FDI under automatic route permitted for manufacturing of components/systems for satellites, ground segment, and user segment.
Benefits of Increased Private Sector Participation
- It is expected to generate employment, promote modern technology absorption, and enhance sector self-reliance.
- It aims to integrate Indian companies into global value chains, enabling them to establish manufacturing facilities within the country.
Division of Satellites Sub-sector
- The satellite sub-sector has been divided into three activities with defined limits for foreign investment.
- As per the existing FDI policy, foreign investment is allowed in establishment and operation of satellites via government-approval route only.
Prelims Takeaway
- Foreign Direct Investment (FDI)
- Foreign Portfolio Investment (FPI)