FDI INVESTMENT RULES: MODI GOVT CHANGES NORMS FOR SPACE SECTOR AHEAD OF TESLA BOSS ELON MUSK'S INDIA VISIT
FDI Investment Rules: The Finance Ministry has notified amendments in the Foreign Direct Investment (FDI) rules for satellite-related activities. The move from the government came days ahead of Tesla CEO Elon Musk's India visit, who is expected to meet with various Indian space companies during his visit from April 21 to 22. Concurrently, approvals for Musk's satellite internet project, Starlink, are nearing finalization.
FDI refers to investment made by foreign entities into the country's businesses or assets with the aim of establishing lasting interest and control.
According to a PTI report, the changes made in the FDI policy for the space sector through a gazette notification dated April 16, 2024, prescribe a liberalized entry route and provide clarity for FDI in satellites, launch vehicles, and associated systems or subsystems, the creation of spaceports for launching and receiving spacecraft, and manufacturing space-related components and systems.
"These rules may be called the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024," said the gazette notification. "The liberalized entry routes under the amended policy are aimed at attracting potential investors in Indian companies in space. The Union Cabinet earlier this year gave approval to these amendments," said the PTI report.
According to the recent notification, 100 percent foreign direct investment will be allowed, in which the automatic route permits up to 74 percent for satellite manufacturing & operation, satellite data products, and ground segment & user segment. Beyond 74 percent, the government route is required.
The PTI report further pointed out that as per the new norms, for Launch Vehicles and associated systems or subsystems, Spaceports creation, up to 49 per cent FDI is automatic; beyond that, government permission is necessary. Additionally, 100 per cent FDI is allowed for manufacturing components and systems/sub-systems for satellites, ground segment, and user segment without government approval. Previously, FDI for satellite establishment and operation required government approval.
According to the PTI report, the Union Cabinet, in alignment with the Indian Space Policy 2023, has eased FDI policies in the Space sector by introducing more liberalized thresholds for various sub-sectors/activities.
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2024-04-17T16:00:34Z dg43tfdfdgfd