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- 22 Feb 2024
- ICICI Securities
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GOVT APPROVES AMENDMENT IN FDI POLICY IN SPACE SECTOR
News: The government has approved the amendment in foreign direct investment (FDI) policy in the space sector. Now, 100% FDI has now been permitted to manufacture components and systems/sub-systems for satellites, ground segment and user segment. For satellite manufacturing & operation, satellite data products and ground segment & user segment, FDI up to 74% is allowed under the automatic route, beyond which government route will be applicable. Sub-sector comprising launch Vehicles and associated systems or sub-systems, the Creation of Spaceports for launching and receiving Spacecraft can get 49% FDI through automatic routes, beyond which govt approval is required. As per the previous FDI policy, FDI was permitted in establishment and operation of Satellites through the Government approval route only.
Views: This is a significant move for the Indian space industry as the private players would be able to achieve global scale of operations and would increase their share in the global space economy. Players like Data Patterns, Astra Microwave (which have entered into manufacturing of satellites and space electronics) would benefit the most from this development. MTAR Tech (which manufactures critical components of launch vehicles) and Premier Explosives (which manufactures propellants for launch vehicles) would also benefit significantly.
Impact: Positive