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Finance Ministry notifies a new FDI limits for satellite related activities under FEMA

Published on April 19, 2024
Current Context: The Finance Ministry has indeed notified new Foreign Direct Investment (FDI) limits for various satellite-related activities under the Foreign Exchange Management (Non-Debt Instruments) Rules.
Finance Ministry notifies a new FDI limits for satellite related activities under FEMA
  • Here are the key points:
    • The new FDI limits for satellite activities became effective on April 16, 2024.
    • The investee entity shall be subject to sectoral guidelines as issued by the Department of Space from time to time.
    • Under the amended FDI policy, 100% FDI is allowed in the space sector.
    • Satellite manufacturing & operation, satellite data products, and ground segment & user segment can get FDI up to 74% under the automatic route. 
    • Beyond 74%, government route will be applicable.
    • The creation of spaceports for launching and receiving spacecraft can get FDI through automatic routes up to 49%. 
    • Beyond 49%, these activities are under the government route.
    • 100% FDI under the automatic route has now been permitted to manufacture components and systems/sub-systems for satellites, ground segment, and user segment.
    • This move is aimed at attracting more investors to the Indian space industry.
    • The liberalized entry routes under the amended policy are expected to attract potential investors to invest in Indian companies in space.

Question:

Q.1 For satellite manufacturing & operation, satellite data products, and ground segment & user segment, up to what percentage can FDI be obtained under the automatic route?
a. 49%
b. 74%
c. 100%
d. 50%
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