Now beaming: Relaxed FDI cap for space inc

economictimes.indiatimes.com:

Foreign Exchange Management (Non-Debt Instruments) Rules. The new rules, based on the Cabinet decision in February on the relaxed FDI caps, came into effect from April 16, according to a gazette notification by the ministry.

The rules, coming just days ahead of Tesla chief Elon Musk's India visit, are aimed at drawing a larger number of foreign investors into the Indian space sector. Musk is reportedly planning to announce investments of $2-3 billion, mainly in the EV segment, and meet Indian space players as well during his India visit starting April 21.

As per the new rules, up to 100% FDI is allowed in the space sector. However, up to 74% FDI is permitted under the automatic route in satellite manufacturing and operation, satellite data products and ground and user segment. Beyond 74%, FDI in these activities requires government approval.

Similarly, up to 49% FDI is allowed under the automatic route in the launch vehicles and associated systems or subsystems, and in the creation of spaceports for launching and receiving spacecraft. Beyond this limit, government approval is needed. Also, up to 100% FDI under the automatic route is allowed in the manufacturing of components and systems or sub-systems for satellites and the ground and user segments.

The latest notification said: «the investee entity shall be subject to sectoral guidelines as issued by the department of space».