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India Opens Doors To 100% Foreign Investment In The Space Sector

22 February 20245 mins read by Angel One
This article delves into the Indian government's historic decision to allow 100% foreign direct investment (FDI) in specific segments of the space sector.
India Opens Doors To 100% Foreign Investment In The Space Sector
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India has embarked on a significant policy reform journey in its space sector, aiming to attract foreign investment and foster growth and innovation. The recent amendment in the Foreign Direct Investment (FDI) policy on the space sector, approved by the Union Cabinet under the leadership of Prime Minister Shri Narendra Modi, marks a paradigm shift towards liberalisation and global integration.

This article explores the implications of the amended FDI policy, highlighting its potential to transform India’s space industry and contribute to economic development.

Policy Overview

The FDI policy amendment reflects India’s commitment to realising the vision of an Atmanirbhar Bharat, championed by Prime Minister Modi. By liberalising the space sector for foreign direct investment in prescribed sub-sectors and activities, the government aims to enhance the Ease of Doing Business in the country. The amended policy seeks to attract greater FDI inflows, thereby fostering investment, income, and employment growth.

Key Amendments and Benefits

Under the amended FDI policy, the space sector now allows 100% FDI, opening doors for potential investors to invest in Indian companies in space. The policy provides liberalised entry routes for various activities, enabling up to 74% FDI under the automatic route for satellite-related activities, and up to 49% for launch vehicles and associated systems. Additionally, manufacturing of components and systems/sub-systems for satellites, ground segments, and user segments now permits up to 100% FDI under the automatic route.

The increased private sector participation is expected to generate employment opportunities, enable technology absorption, and make the sector self-reliant. By integrating Indian companies into global value chains, the policy encourages ‘Make In India’ and ‘Atmanirbhar Bharat’ initiatives, fostering domestic manufacturing and innovation.

Stocks to Watch

Following the policy update, several stocks in the space and defence sectors are poised for potential growth and investment opportunities:

Sr. No Company Name Description
1 Data Patterns (India) Ltd Provides electronic solutions for defence and aerospace industries.
2 Paras Defence and Space Technologies Ltd Engages in designing, manufacturing, and testing defence and space engineering products.
3 Bharat Heavy Electricals Ltd Manufacturer of power plant equipment, offering design, engineering, and servicing for various sectors.
4 Centum Electronics Ltd Provides design and manufacturing services for critical products in defence and aerospace sectors.
5 MTAR Technologies Ltd Manufactures machinery and equipment for energy, nuclear, space, and aerospace industries.
6 Linde India Ltd Supplies gases and equipment essential for space mission operations.
7 Hindustan Aeronautics Ltd Develops, manufactures, and supplies aerospace products.
8 Mishra Dhatu Nigam Ltd Develops components for heavy-lift launch vehicles used in lunar missions.

Economic Impact and Future Outlook

The liberalised FDI policy in the space sector is expected to boost India’s space ambitions, fostering innovation, technology development, and economic growth. With a push from Prime Minister Modi, India aims to privatise space launches and increase its share of the global launch market. The policy reform aligns with India’s aspirations to attract $100 billion in annual FDI and accelerate economic growth.


In conclusion, the amendment in the FDI policy on the space sector heralds a new era of growth and opportunity for India’s space industry. By opening doors to foreign investment, India aims to leverage private sector participation to enhance its space capabilities, drive innovation, and foster economic development. The policy reform underscores India’s commitment to becoming a global leader in space exploration and technology.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.

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