India Amends FDI Norms in Space Sector

Current Context: The Indian government has recently amended the Foreign Direct Investment (FDI) policy in the space sector on 6th March 2024.

• The amendment aims to realize the vision of an Atmanirbhar Bharat as laid down by PM Shri Narendra Modi.
• The space sector has been liberalized for foreign direct investment in prescribed sub-sectors/activities.
• The FDI policy reform will enhance Ease of Doing Business in the country, leading to greater FDI inflows and thereby contributing to growth of investment, income, and employment.
• The satellites sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector.
• The Indian Space Policy 2023 was notified as an overarching, composite, and dynamic framework to implement the vision for unlocking India’s potential in the Space sector through enhanced private participation.
• The Union Cabinet has eased the FDI policy on Space sector by prescribing liberalized FDI thresholds for various sub-sectors/activities.
• Under the amended FDI policy, 100% FDI is allowed in the space sector.
• The liberalized entry routes under the amended policy are aimed to attract potential investors to invest in Indian companies in space.
• The entry route for the various activities under the amended policy are as follows:
• Up to 74% under Automatic route: Satellites-Manufacturing & Operation, Satellite Data Products and Ground Segment & User Segment. Beyond 74% these activities are under the government route.
• Up to 49% under Automatic route: Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft. Beyond 49% these activities are under the government route
• Up to 100% under Automatic route: Manufacturing of components and systems/ sub-systems for satellites, ground segment, and user segment.

Question:

Q.1 Under the amended FDI policy, what percentage of FDI is allowed in the space sector?
a. 49%
b. 74%
c. 100%
d. 0%