The new policy enables up to 100% FDI under the automatic route for the manufacturing of satellite sector components and subsystems, 49% for satellite launch vehicles, and 74% for satellite manufacturing/operations and satellite data products.
Although it is a continuation of the policy changes that gave private businesses access to the space industry, it also marks a break from the long-standing government dominance of the field. As part of the 2023 Indian Space Policy, the private sector was acknowledged as a vital player in the space economy and efforts to “enable, encourage and develop a flourishing commercial presence in space” were made.
Additionally, a number of legislative actions have been taken to facilitate the policy’s implementation. The India National Space Promotion and Authorization Centre, or InSPACEe, was designed to function as a single point of contact for the approval of projects and proposals.
Source: The Hindu Business Line
It is anticipated that the new strategy will draw technology and finance to the field, which is heavily dependent on both. The goal of the policy change is to entice all major and small international actors in the space industry, including investors, operators of space missions, inventors of new technologies, and designers of applications, to the Indian space industry. Since manufacturers may now access worldwide funding to increase manufacturing and production capacity, launch vehicle operations and component manufacturing are expected to benefit.
Additionally, it has been noted that the 49% FDI for launch vehicles would represent the necessity to strike a balance between national security and foreign investment, since domestic businesses would continue to have control and decision-making authority while gaining access to foreign capital, technology transfer, and knowledge.
Source: WION
The sector’s opening up is consistent with India’s goal of five times its present 2 percent participation in the global space market by 2032. By then, the space industry is expected to grow to $47.3 billion. The sector has embraced the new guidelines and anticipates $25 billion in additional investment over the following ten years. Although some believe that the 74% autonomous route in satellite communications may not be sufficient to draw in foreign investment, the general mood is hopeful.
The choice shouldn’t be viewed as solely a business decision. It ought to assist the nation in becoming a technology leader in fields with significant strategic ramifications. In the upcoming years, India has a number of ambitious plans and projects in the works, and the sector will benefit from forward-thinking and supporting policies.
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