NEW DELHI: Ahead of Starlink-promoter Elon Musk‘s visit to India, the Centre has notified a new Foreign Direct Investment (FDI) limit for various satellite-related activities under Foreign Exchange Management (Non-Debt Instruments) Rules, enabling foreign investors to firm up investment plans in the sector.
A notification from the finance ministry said the new rules called the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024 are effective from April 16.In February, the govt had approved an amendment in FDI policy for the space sector.
Musk, who will meet PM Modi during this visit to India, is expected to make several major announcements, including the launch of Starlink and investments ranging from $2 billion to $3 billion in India. Musk-owned Starlink has also applied for the permit to start satcom services in India. Starlink has a constellation of around 4,000 low earth orbit (LEO) satellites.
Under the new changes, up to 100% FDI under the automatic route is now permitted for manufacturing of components and systems or sub-systems for satellites, ground segment and user segment. And FDI up to 49% under the automatic route is now permitted for launch vehicles and associated systems or sub-systems and creation of spaceports for launching and receiving spacecraft while beyond this limit govt approval will be required.
Previously, FDI in the sector was permitted in establishment and operation of satellites through the govt approval route only.
The notification further said, “The investee entity shall be subject to sectoral guidelines as issued by the Department of Space from time to time.” The notification allows up to 100% FDI in the sector with 74% under the automatic route for satellite manufacturing and operations, ground segment and user segment as well as satellite data products.
The notification defines various satellite-related activities. Here, “Satellites – Manufacturing and Operation” means end-to-end manufacturing and supply of satellite or payload, establishing the satellite systems, including control of in-orbit operations of the satellite and payload. “Satellite Data Products” refers to the reception, generation, or dissemination of earth observation or remote sensing satellite data and data products, including Application Interfaces (API).
“Ground Segment” means the supply of satellite transmit or receive earth stations, including earth observation data receive stations, gateways, teleports, satellite telemetry, tracking and command stations, satellite control centres, etc.
“User Segment” means the supply of user ground terminals for communicating with the satellite, which is not covered under the ground segment.
A notification from the finance ministry said the new rules called the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2024 are effective from April 16.In February, the govt had approved an amendment in FDI policy for the space sector.
Musk, who will meet PM Modi during this visit to India, is expected to make several major announcements, including the launch of Starlink and investments ranging from $2 billion to $3 billion in India. Musk-owned Starlink has also applied for the permit to start satcom services in India. Starlink has a constellation of around 4,000 low earth orbit (LEO) satellites.
Under the new changes, up to 100% FDI under the automatic route is now permitted for manufacturing of components and systems or sub-systems for satellites, ground segment and user segment. And FDI up to 49% under the automatic route is now permitted for launch vehicles and associated systems or sub-systems and creation of spaceports for launching and receiving spacecraft while beyond this limit govt approval will be required.
Previously, FDI in the sector was permitted in establishment and operation of satellites through the govt approval route only.
The notification further said, “The investee entity shall be subject to sectoral guidelines as issued by the Department of Space from time to time.” The notification allows up to 100% FDI in the sector with 74% under the automatic route for satellite manufacturing and operations, ground segment and user segment as well as satellite data products.
The notification defines various satellite-related activities. Here, “Satellites – Manufacturing and Operation” means end-to-end manufacturing and supply of satellite or payload, establishing the satellite systems, including control of in-orbit operations of the satellite and payload. “Satellite Data Products” refers to the reception, generation, or dissemination of earth observation or remote sensing satellite data and data products, including Application Interfaces (API).
“Ground Segment” means the supply of satellite transmit or receive earth stations, including earth observation data receive stations, gateways, teleports, satellite telemetry, tracking and command stations, satellite control centres, etc.
“User Segment” means the supply of user ground terminals for communicating with the satellite, which is not covered under the ground segment.