On Wednesday, India announced its decision to permit 100% foreign direct investment (FDI) in satellite system manufacturing without prior approval. Additionally, the country will relax launch vehicle rules, aiming to secure a larger share of the global space market.
Before the policy change, such investments required government approval, a process that could take months.
Here are some of the changes India implemented.
Three categories
India, for investment purposes, has categorized its space sector into three main groups: companies manufacturing rockets for satellite launches, satellite manufacturers, and companies producing satellite components. This strategic division aims to provide clarity and facilitate targeted investment in different segments of the space industry.
Manufacturing components for satellites
Under the automatic route, India has allowed 100% foreign investment in this category, eliminating the need for government approval. This move streamlines the process for investments, making it more accessible for foreign entities.This change will increase access to technology for critical communication systems such as transponders, antennas, and power systems.
Satellite manufacturing and operations
India has permitted satellite manufacturing and operations to receive 74% of overseas investment without requiring government approval. This move would enable key sector players, including SpaceX led by Elon Musk, Maxar, Viasat, Intelsat, and Airbus to enter the market with greater ease. According to experts, satellite manufacturing is the most profitable area for commercialisation, with more viable partnerships. Companies will require government approval to increase their equity beyond a 74% stake in the operations.
Launch vehicles and associated systems
The government will allow 49% FDI through the automatic route to manufacture rockets and their components. The policy has the potential to attract interest from companies like United Launch Alliance, Jeff Bezos’ Blue Origin, and SpaceX. However, for ownership beyond 49%, foreign investors will be required to seek government approval.
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