Space stocks jump up to 7% after government approves 100% FDI

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Also Read: Union Cabinet approves amendment in FDI policy on space sector, up to 100% in making components for satellites As per the existing FDI policy, FDI is permitted in the establishment and operation of satellites through the government approval route only. "In line with the vision and strategy under the Indian Space Policy 2023, the Union Cabinet has eased the FDI policy on the space sector by prescribing liberalised FDI thresholds for various sub-sectors and activities," the press release said.

The amended policy introduces specific entry routes for various sectors: Firstly, for activities like Satellites manufacturing and operation, satellite data products, ground segmentation, and user segment, up to 74% FDI is permissible under the automatic route. However, any investment beyond 74% in these activities necessitates government approval.

Secondly, the automatic route allows up to 49% FDI for launch vehicles and associated systems or subsystems, as well as for the creation of spaceports for launching and receiving spacecraft. Investments exceeding 49% in these sectors require government approval.

Lastly, for the manufacturing of components and systems/sub-systems for satellites, ground segments, and user segments, the automatic route permits up to 100% FDI, allowing full foreign ownership without needing government approval.> The government said the proposed reforms seek to liberalise the FDI policy provisions in the space sector by prescribing a liberalised entry route and providing clarity for FDI in satellites, launch vehicles, and associated systems or subsystems, the creation of spaceports for launching and receiving spacecraft; and the manufacturing of space-related components and systems. Following this