News Brief
Ahead Of Elon Musk's Visit, India Notifies Major FDI Liberalisation In Space Sector
Elon Musk's Starlink to provide satellite internet services in India.
The Ministry of Finance has amended regulations under the Foreign Exchange Management Act (FEMA) to implement its previous decision allowing up to 100 per cent foreign direct investment (FDI) in the space sector.
These changes introduce three categories of entry routes for FDI, which are more liberal than before.
The notification dated 16 April, comes ahead of the upcoming visit of Tesla CEO Elon Musk to India.
During his visit, Musk is expected to engage with space startups, discuss initiatives for his space project Starlink, and unveil plans for his electric vehicle investments.
Starlink, a SpaceX initiative, aims to provide high-speed internet globally through a network of low-earth-orbit satellites.
In February, the Union Cabinet approved a policy amendment to permit up to 100 per cent FDI in specific space sector categories.
According to the latest notification from the Finance Ministry, 100 per cent FDI is allowed in the areas of satellite manufacturing and operation, satellite data products, and both ground and user segments, with automatic approval for up to 74 per cent of the investment.
Any investment above this threshold will require government approval.
Additionally, automatic FDI is allowed up to 49 per cent for manufacturing launch vehicles, related systems or subsystems, and developing spaceports for launching and receiving spacecraft, with higher investments needing government approval.
The regulations also stipulate that entities receiving investment will adhere to sectoral guidelines issued by the Department of Space. The updated rules took effect from 16 April.
Definitions have also been clarified for various terms: 'Satellites – manufacturing and operation' involves comprehensive satellite manufacturing and supply, including the establishment and in-orbit control of satellite systems.
'Satellite data products' are defined as the handling of data from earth observation or remote sensing satellites, including the use of Application Interfaces (API).
The 'ground segment' and 'user segment' cover equipment for satellite communication, not overlapping with each other.
Lastly, 'launch vehicles and associated systems or subsystems' and 'spaceports' are defined with respect to their roles in spacecraft deployment and launch facilities.
