Government eases approval process for FDI in space sector

India will allow 100% foreign direct investment in the manufacturing of satellite systems without official approval and ease rules for launch vehicles, a government statement said, aiming to capture a greater share of the global space market.

India’s space ambitions got a boost when it became the first country to land a spacecraft near the moon’s uncharted south pole in August – and the fourth to achieve a soft landing – just days after a similar Russian mission failed.

The government said in a statement late on Wednesday that foreign companies can invest up to 100% in the manufacturing of components and systems or sub-systems for satellites without approval.

Foreign companies planning to build satellites in India will not require government approval up to 74% investment; Without such approval for investment in launch vehicles, investment could go up to 49%, the statement said.

India has privatized space launches and aims to increase its share of the global launch market fivefold, which some expect to be worth $47.3 billion by 2032. India currently accounts for about 2% of the space economy.

The country hopes liberalized rules for the space sector, long controlled by the government, will attract interest from Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin, among others.

The reform in the foreign direct investment policy is expected to boost employment and allow companies to set up manufacturing facilities in India, the government said in the statement.

“This will give India access to the latest technological advancements and much-needed funds not only from within the country but also from international investors,” Indian Space Association Director General AK Bhatt said.

Space-related Indian stocks such as Paras Defense & Space Technologies, MTAR Technologies, Taneja Aerospace & Aviation and Apollo Micro Systems rose 2% to 5% on Thursday.

© Thomson Reuters 2024

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