FDI in space sector: India poised to grab major share of global space economy says IN-SPACe chairman

Chairman of Indian Space Promotion and Authorisation Centre Pawan Kr Goenka

The easing up of foreign direct investment (FDI) norms in the space sector will enable Indian startups to access global funds and expand manufacturing and production of capital-intensive space products, Pawan Kumar Goenka, chairman of the Indian Space Promotion and Authorisation Centre, said on February 22.

On February 21, the Union government amended the existing norms for FDI in the space sector to allow 100 per cent foreign investments through the automatic route for certain specific space activities.

"In just three years from 2021 to 2023, $37.1 billion has been raised by the space sector globally. A significant portion of this capital is going to space start-ups. The easing of FDI will enable Indian space start-ups working on capital-intensive space products to now access this global pool of capital to expand manufacturing and production capacity," Goenka said.

Also read: Revised FDI norms in space sector will boost access to new tech and funding, says industry

"Indian space start-ups can now explore innovative business models to reach a growing addressable market around the world," he added.

Under the revised norms for FDI in the space sector, up to 100 per cent foreign investment is allowed for the manufacturing of components and systems for satellites, ground segments and user segments, through the automatic route.

For those engaged in end-to-end manufacturing and operation of satellites, the government has allowed up to 74 per cent foreign investment through the government route. Beyond 74 per cent, entities will have to obtain the permission of the government.

"This bold step isn't just about attracting investments but transforming India's space capabilities through mutual collaboration for innovation and growth. Private sector interest in space is soaring worldwide. It is estimated that the global space industry will generate over $1 trillion in revenue in 2040. India is well-equipped with talent and infrastructure backed by enabling policies to seize this opportunity," Goenka said.

"The new policy inviting investors to join hands with Indian companies will allow NGEs to contribute to the vision of making India a global leader in the space sector. It will empower them to develop cutting-edge products, expand our global presence, and grab a significant share of the booming global space economy. India's journey to becoming a space powerhouse is on track," he added.