Space FDI: Finance ministry notifies FDI in space sector; gives better access to capital, say startups

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The ministry of finance on April 16 notified Foreign Direct Investment (FDI) in the Space sector under the Foreign Exchange Management Rules which will now enable Indian space startups working on capital-intensive space products to now access a global pool of capital.

The cabinet on February 21 had allowed 74% foreign direct investment (FDI) under automatic route for satellite manufacturing, upto 49% under automatic route for launch vehicles, and upto 100% under automatic route for manufacturing of components and systems.

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For creation of Spaceports for launching and receiving Spacecraft investment will be via government route beyond 49%.

These rules shall come into force on the date of their publication in the official gazette.

The investee entity shall be subject to sectoral guidelines as issued by the department of Space from time to time, the gazette notification said.

It provides much-needed regulatory clarity for foreign investments across all domains in India’s space sector, said Pawan Kumar Chandana, chief executive of Skyroot Aerospace. “For launch vehicles and satellite operation/data, 49% and 74% FDI respectively in the automatic route, and 100% FDI in the government route, will help boost investments, giving better access to capital and aligning with global standards,” he said.

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Agnikul chief executive Srinath Ravichandran concurred saying there is finally much needed clarity. “It is a big boost for the sector as a whole and I think this will help all of us in our capital raising efforts and rapid growth plans. I think this is enough buffer for companies in each sector to raise capital,” he said.“This decision paves way for growth and innovation, fostering a new era of space exploration and commercialisation in India. We are poised to leverage these opportunities to make significant contributions to the global space community and achieve remarkable milestones,” said Sanjay Nekkanti, chief executive, Dhruva Space.

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