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Changes in FDI norms:
The satellite sector has been split into three categories, each with specific restrictions on foreign investment.
- Production of parts for satellites: For satellite systems and component manufacture, up to 100% FDI will be allowed under the Automatic route.
- Production and management of satellites: Up to 74% FDI under the automatic route for satellite manufacturing and satellite data products.
- For investments beyond 74%, government approval is required.
- Launching vehicles and their components: For the construction of spaceports and launch vehicles, up to 49% of FDI under the automatic route will be permitted. Government clearance is required for investments larger than 49%.
Significance of revised norms:
- More investment will be attracted to the Indian space sector.
- More job creation, availability of modern technology, and self-sufficiency in the sector.
- It will link Indian firms with global supply chains, allowing them to set up manufacturing plants locally.
Why in news?
The Union Cabinet recently approved 100% Foreign Direct Investment (FDI) in the space sector.
