With the Indian government easing up the foreign direct investment (FDI) norms in the space sector on February 21, the industry has lauded the development claiming that the move will give a boost to the country in terms of access to latest technology and funding from foreign investors.
The revised 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.
Union Minister Anurag Singh Thakur, while addressing a Union Cabinet briefing on February 21, announced that upto 100 per cent FDI will be allowed through the automatic route for satellite system and subsystem manufacturing and other similar segments; upto 74 per cent for end-t0-end satellite manufacturing and upto 49 per cent for launch vehicle and spaceport segment.
Speaking to Moneycontrol, Hyderabad-based launch vehicle maker Skyroot Aerospace's CEO and co-founder Pawan Kumar Chandana said, "It (The revised space FDI norms) gives much needed regulatory clarity for foreign investments for all domains in India’s space sector. For Skyroot being in launch vehicle domain, 49% FDI in automatic route and 100% FDI in government route will help boost investments and open access to capital easier and at par with global standard."
"There is finally clarity here. It is a big boost for the sector as a whole and I think this will help all of us in our capital raise and growth plans," Srinath Ravichandran, CEO and co-founder of Chennai-based Agnikul Cosmos, told the publication.
Also read: Digantara's $10 million fundraise highlights the need for FDI in space sector
Lt. Gen. AK Bhatt (Retd.), Director General, Indian Space Association, said, "The liberal FDI limits by automatic route for end-to-end satellite manufacturing & operation, components and systems/ sub-systems for satellites, satellite data products and ground segment & user segment, launch vehicles, creation of spaceports will boost the confidence of all space industry members, including the biggest global players in the space and satellite domain."
The ISpA represents 32 start-ups including Pixxel, Agnikul Cosmos, Skyroot Aerospace, Dhruva Space, and Digantara apart from major players such as Bharti Airtel, L&T, and OneWeb, among others.
"This will give India, access to the latest tech advances and much-needed funds not only from the country but from international investors too. At current, the space sector in India accounts for little over about two per cent of the global space economy and this move will help the country to gain a much larger pie in the global market," Bhatt further said.
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