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India is changing the game in its space sector by allowing up to 100 percent foreign investment. This smart move aims to attract more international investors, encourage tech sharing, and boost research collaborations in space.
Rules for Foreign Investment in India's Space Sector
Understanding the new Foreign Direct Investment (FDI) rules is key to grasping the opportunities for foreign players. The changes match the goals of the Indian Space Policy 2023, opening doors for more collaboration and investment.
Big Change: 100% Foreign Investment
The updated rules now permit 100 percent foreign investment for making satellite components, systems, or sub-systems, as well as ground and user segments. This big shift makes it easier for foreign investors to work with Indian space companies.
Breakdown of Satellite Sub-Sectors
The FDI rules categorize satellite activities into three types, each with its foreign investment limits:
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Satellite Manufacturing and Operation: Up to 74 percent of foreign investment is allowed without government approval. Beyond that, approval is needed.
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Launch Vehicles and Associated Systems: Up to 49 percent of foreign investment is allowed without government approval. More than that requires approval.
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Manufacturing Components and Systems: A significant change allows 100 percent foreign investment for making components and systems for satellites, ground segments, and user segments.
Here the major goal is to encourage private companies to get involved. This move is expected to create jobs, help with tech, and make the sector more self-sufficient.
India's Growing Space Economy
The new rules fit with the goals of the Indian Space Policy 2023, focusing on boosting the country's space abilities by getting more private companies on board.
According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), India saw a big increase in space start-ups, reaching 189 in 2023 from just one in 2014. Investments in Indian space start-ups also went up to US$124.7 million in the same year.
Right now, India's space economy is worth about US$8.4 billion, making up 2-3 percent of the global space industry. Predictions say that by 2033, India's space economy could hit US$44 billion, making up 8 percent of the global space economy.
To make this happen, private companies will play a big role, in handling tasks like making satellites, launch vehicles, satellite services, and ground equipment.
