SPACE FDI RULES - SCI
& TECH
News: Express View on Elon Musk and
India’s space race
What's in the news?
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The government may have timed the notification of
its liberalised foreign direct investment (FDI) rules with the visit of US tech
mogul Elon Musk next week.
Key takeaways:
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India’s share of the global space economy is between 2 and 3 percent.
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The government has plans to increase it to more
than 10 per cent by 2030.
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According to the Indian National Space Promotion
and Authorisation Centre (IN-SPACe),
an autonomous agency of the Department of Science, this scale-up will require
an investment of $22 billion in the next 10 years.
ISRO’s Space Policy:
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The Space Policy redefined ISRO’s role and tasked
the agency with research and development.
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The policy also recognised the private sector as an important stakeholder. Relaxing
entry barriers for FDI is a continuation of the thrust on capturing a large
share of the global space economy.
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It also provides
regulatory clarity. For example, the provision relating to spaceports.
○
Currently, ISRO operates spaceports in the country.
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By allowing 49 percent FDI in the segment, the
government seems to be signalling its intent to make the ecosystem more
enabling for private companies.
FDI Policy and Space
Sector:
India has updated its FDI policy to boost its space sector such as
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74% FDI is now permitted under the automatic route for
satellite manufacturing and data products.
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49% FDI is allowed for launch vehicles and spaceports.
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Up to 100% FDI is possible for manufacturing components required
by the space sector.
Foreign Direct
investment Investment (FDI):
●
It refers to investments made by foreign entities
in businesses or corporations located in another
country.
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This can take the form of either establishing
business operations or acquiring business assets in the other country, such as ownership or controlling interest in a
foreign company.
Routes of FDI in India:
1. Automatic Route:
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Under the Automatic Route, neither the foreign investor nor the Indian company needs approval from the Government of
India for the investment.
2. Government Route:
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Approval from the Government of India is necessary before making an investment.
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Proposals for FDI under this route are reviewed by the respective Administrative
Ministry/Department.
FDI Prohibited Sectors
in India:
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Real Estate Business
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Gambling and Betting
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Chit Funds
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Nidhi Company
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Trading in Transferable Development Rights (TDR)
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Manufacturing of Tobacco Products
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Sectors Not Open to Private Sector Investment -
Includes atomic energy and railway operations except for activities allowed
under the Consolidated FDI policy.
● Lottery Business - Including government or private lotteries, and online lotteries.