The Indian space sector has recently experienced significant growth due to updates in official rules to attract global investors and companies.
“The new foreign direct investment policy has raised limits on foreign investment, potentially spurring renewed interest in the South Asian space community,” said the Indian cabinet.
India has been making strides in increasing participation in the space sector, with public and private actors taking measures to drive growth.
The Indian Space Research Organization (ISRO) has also gained global attention with recent successful events, such as the moon landing of its Chandrayaan-3 spacecraft and partnership with NASA over joining the Artemis Accords. However, foreign direct investment restrictions have limited the country’s ability to attract international investors and caused delays in funding for its growing space tech startups.
In an effort to address these issues, the Indian government, led by Prime Minister Narendra Modi, approved an amendment to the FDI norms on Wednesday, allowing increased overseas investment in the space sector, in some cases up to 100%.
The new policy will define three different categories for foreign investment:
- Up to 49% (foreign ownership) for launch vehicles and associated systems and subsystems, creation of spaceports for launching and receiving spacecraft
- Up to 74% for satellite manufacturing and operation, satellite data products and ground segment and user segment
- Up to 100% for manufacturing components and systems and subsystems for satellites, ground segment and user segment
Foreign investments beyond these thresholds will require government approval.
In June 2020, the Indian government also passed space sector reforms and established the Indian National Space Promotion and Authorization Center, enabling private companies to utilize ISRO resources and infrastructure.
Additionally, new policies and guidelines for private participation in the space sector were introduced last year. The Indian government also replaced century-old rules with a new telecom act, opening doors for global satellite-based broadband service providers, including Elon Musk’s Starlink.
Currently, India has around 190 space tech startups that provide solutions such as launch vehicles, space situational awareness, and hyperspectral imagery. According to government data, investments in Indian space startups totaled over $124 million last year. The country’s space economy is projected to reach $44 billion by 2033, up from $8.4 billion in 2020.
The Indian Space Association, which represents space tech startups and private companies, believes that the updated FDI norms will greatly benefit India’s presence in the global space economy, which currently stands at just above a 2% share.
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