Space regulator Indian Space Promotion and Authorisation (IN-SPACe) chairperson Pawan Kumar Goenka said that the long-awaited foreign direct investment (FDI) policy for the space sector is undergoing the “last leg of processes” and is expected to be out soon.
"FDI policy right now is going through the well-defined process that the government has. And I would say that we are near the last leg of the process. I cannot tell you how long it will take to complete the last leg but we are we are nearing now. So it shouldn't be very far," Goenka told Moneycontrol in an interview.
Also read: India’s space startup ecosystem needs one or two big hits: Pawan K Goenka, IN-SPACe
The policy has been long awaited by the space ecosystem, especially private players such as space-tech startups, which in the last couple of years have seen an uptick in investment interest from abroad.
Last year, Singapore's sovereign fund led a $51 million funding round in Hyderabad-based Skyroot Aerospace (which became the first private company from India to launch a rocket into space). Recently, Bengaluru-based Digantara led $10 million in a Series A1 round led by Peak XV Partners.
However, due to the current norms regulating investment from abroad, these startups are facing considerable hiccups in landing these investments. For instance, in Digantara's case, IN-SPACe had to assuage investors that the new FDI policy for space will be out soon. Apart from that, the startup also had to make some organisational changes to land the deal.
Currently, FDI in the space sector is allowed up to 100 percent in the area of satellite establishment and operations, but only through the government route.
The need for the policy gets higher as Goenka expects the Indian space startup ecosystem to attract more investments than the $110 million it landed last year.
"Last year, we had $110 million of investment, a small but significant increase over the year before. This year, in five months, we already have had $35 million, and a lot of conversations are happening right now. So I would expect that number $110 million to be higher this year."
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