The Ministry of Finance, in a notification on Tuesday, amended the Foreign Exchange Management Act guidelines to align with the revised Foreign Direct Investment Rules for the Space Sector.
This follows a cabinet approval regarding the same earlier in February when the amendment was first approved, in a bid to attract overseas investment and private players. This was also subsequently notified by the Department for Promotion of Industry and Internal Trade in early March, 2024.
The approval follows the government's stated agenda to involve more more of the private sector in the domain of space technology, as stated in the Indian Space Policy 2023.
As per the new Foreign Direct Investment norms, the government has allowed up to 74% FDI under automatic route for satellite manufacturing and operation, satellite data products, and ground and user segments. Beyond 74%, these areas would require governmental approval.
Similarly, 49% FDI is allowed through the automatic route for launch vehicles and associated systems or subsystems, the creation of spaceports for launching and receiving spacecraft.
And for manufacturing of components and systems/sub-systems for satellites, ground and user segments, FDI is fully allowed at 100% under the automatic route.
The latest move comes ahead of Tesla and SpaceX Chief Executive Elon Musk's scheduled visit later this week.
"The investee entity shall be subject to sectoral guidelines as issued by the Department of Space from time to time," the notification added.
The FEMA tweaks to support the same are expected to be made effective from April 16, 2024.
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