Easing of FDI norms: Space industry says it will pave way for growth, innovation

New Delhi: India's nascent private space industry on Thursday welcomed the easing of FDI policy for the sector, terming it as a "pivotal move" to boost investments and help the country increase its share in the global space economy.

"The easing of FDI norms will have a similar impact on the space sector as the 1991 liberalisation policy had on the overall economy," Tushar Jadhav, co-founder and Chief Executive Officer Manastu Space told PTI.

Industry leaders said the government decision to permit 100 per cent overseas investment in making components for satellites and up to 49 per cent FDI through the automatic route for launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft has given the much needed clarity for the sector.

Several industry leaders cited examples of how foreign investors were hesitant to invest in the space sector through the government route, which was the case earlier, due to a series of approvals that were required as part of the process.

"It was a big risk for anybody to put in huge money and then getting locked with that money in India as government approvals would be required to even sell shares," an industry leader said.

Industry bodies – Indian Space Association (ISpA) and Satcom Industry Association of India (SIA-India) – also hailed the decision of the Union Cabinet to amend the FDI policy for the space sector.

"This will give India access to the latest tech advances and much-needed funds not only from the country but from international investors too," Lt Gen A K Bhatt (retd), Director General ISpA, said.

"It gives much needed regulatory clarity for foreign investments for all domains in India's space sector. For Skyroot being in the launch vehicle domain, 49 per cent FDI in automatic route and 100 per cent FDI in government route will help boost investments and open access to capital easier and at par with global standard," Pawan Kumar Chandana, co-founder and CEO, Skyroot Aerospace, told PTI.

"It is a very big boost. We consider it a blessing. This will promote investments in the space sector in India," Yashas Karanam, Director, Bellatrix Aerospace said.

"We do expect a lot of FDI. Space is international so there could be a lot of collaboration. We might have strategic tie-ups with larger space companies and there could be investments through such kinds of arrangements as well," Karanam said.

He said India was well positioned to do more affordable and frugal engineering and it made sense for larger space companies to put money into Indian space-tech companies and the sector was likely to boom into a big one.

"This historic decision paves the way for unprecedented growth and innovation, fostering a new era of space exploration and commercialisation in India," Sanjay Nekkanti, CEO, DhruvaSpace, said.

Suyash Singh, Co-founder and CEO, GalaxEye Space said this policy amendment is a very positive and much awaited move, enabling more private sector participation within the Indian Space Ecosystem.

At GalaxEye, this means easier access to global capital investments, further fuelling our ideal to Make in India for the World, he added.

Awais Ahmed, founder and CEO, Pixxel, said, "This significant policy shift marks a new era in the liberalisation of India's space industry. It will go a long way in fostering an ecosystem ripe for innovation, growth, and global collaboration," Director General, SIA-India, Anil Prakash said by offering 100 per cent automatic routes for various activities, including manufacturing components and systems, the policy aims to generate employment, promote technology absorption, and foster self-reliance.

"It aligns with 'Make In India' and 'Atmanirbhar Bharat' initiatives, facilitating the integration of Indian companies into global value chains," Prakash said.

Chennai-based Agnikul Cosmos, which is aiming to launch its first sub-orbital rocket Agnibaan next month, welcomed the move.

"There is finally the much needed clarity here. It is a big boost for the sector as a whole and I think this will help all of us in our capital raise efforts and rapid growth plans," Agnikul Cosmos CEO Srinath Ravichandran said.

Ravichandran described the announcement as a "momentous shift" that would herald a new era of collaborative exploration and technological advancement and pave the way for unprecedented economic growth.

"India's space sector is poised at the brink of a transformative journey, ready to leverage these changes for the greater good of our industry and country," Dr Subba Rao Pavuluri, President SIA-India said.