The government ‘s decision to liberalise foreign direct investment (FDI) in the space sector should go a long way in propelling India into the next phase of space exploration and commercialisation. The new regime will allow 100% FDI in the manufacture of satellite systems without any prior approval and has eased the rules for launch vehicles. Before the policy change, such investments were allowed, but needed government approvals that would sometimes mean months of waiting. The government also divided its space sector into three broad categories for the purpose of investments: Companies that make rockets that launch satellites, those that make satellites and companies that make the parts for manufacturing satellites. The amended rules should grant greater access to technology for critical communication systems such as transponders, antennas and power systems. The higher FDI in satellite manufacturing and operations would also lead to easy entry for key global players in the sector.

This is important as while India is a major space-faring nation, it accounts for only 2% of the $500 billion international commercial market. This can now go up exponentially as the amendments are a distinct improvement over the current FDI policy. Consultancy firm Arthur D. Little has said that with its current trajectory, India’s space economy could reach $40 billion by 2040. However, India has the potential to claim a much larger share of the global space economy, amounting to $100 billion addressable opportunity by 2040. Currently, India’s space industry is valued at $8 billion.

Wednesday’s decisions are in tune with the government’s Space Policy 2023, which permitted private entities to undertake end-to-end activities in the space sector through establishment and operation of space objects, ground-based assets and related services such as communication, remote sensing, navigation, etc. The policy........

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