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100% FDI in Space Sector and its Benefits

Context: The Union Cabinet amendment to the existing Foreign Direct Investment (FDI) policy allowed 100% FDI in the space sector without prior approval.

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Foreign firms planning to build satellites in India would not require government approval up to 74% of the investment. For investment in launch vehicles, investment could go up to 49% without such approval.

Benefits Of The Amendment

Economic & Job Growth

  • Increased FDI inflows: Liberalised entry routes are expected to attract more foreign investment, leading to higher capital injection.
  • Enhanced investments: This will contribute to the growth of investments, income, and employment in the space sector.
  • Sophisticated products and global scale: NGEs (Non-Governmental Entities) can leverage investments to develop more advanced products and achieve a larger global market share.
  • Job creation: Increased private sector participation will generate new employment opportunities in the space industry.

Technological Advancement & Self-reliance

  • Modern technology absorption: The influx of foreign investments will facilitate the transfer of modern technologies, boosting the sector’s technical capabilities.
  • Self-reliance: Increased private participation will contribute to making the Indian space sector more self-reliant and less dependent on foreign technologies.
  • Integration into global value chains: Indian companies will be able to integrate into the global space industry, enhancing their competitiveness and market reach.

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Manufacturing & National Initiatives

  • ‘Make in India’ and ‘Atmanirbhar Bharat’ boost: Setting up manufacturing facilities within the country will support these national initiatives promoting domestic production and self-sufficiency.
  • Development of spaceports: FDI can accelerate the development of spaceports for launching and receiving spacecraft, strengthening India’s space infrastructure.

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