Govt to allow FDIs in the space sector to boost investment

A new policy framework is being developed to address various space technologies

February 11, 2022

Around 75 start-ups have registered in the space technology category in the Startup India portal

Government-approved reforms in the Space Sector aimed at boosting private sector participation in the entire range of space activities in 2020

MoD’s Technology Development Fund has so far awarded six projects to various startups, including one space technology startup

IN-SPACe was established as an autonomous agency within the DoS to enable space activities

Dr Jitendra Singh, Minister of State in the Department of Atomic Energy of India, stated that the Department of Space (DoS) plans to allow foreign direct investment (FDI) to boost investment in the space sector to facilitate private sector involvement in this domain. In line with this, the centre is reviewing existing policies and new policy frameworks are being drafted to address various sub-sectors such as SpaceCom, Remote Sensing, Technology Transfer, Navigation, Space Transportation, Space exploration and Space Situational Awareness. Approximately 75 start-ups have registered in the space technology category in the Startup India portal.

Reforms in the Space Sector

The Government approved reforms aimed at boosting private sector participation in the entire range of space activities in 2020. In 2021, the Indian National Space Promotion and Authorization Centre (IN-SPACe) was established as an autonomous agency within the Department of Space (DoS) to enable space activities, use DoS owned facilities by Non-Governmental Private Entities (NGPEs), and regulate, promote, monitor, and supervise space activities of NGPEs in India. It is expected that the Centre will introduce three additional policies in 2022 as part of the Space Activity Bill. The bill is also expected to clearly define the scope of FDIs in the Indian space sector and the role that the Indian Space Research Organisation (ISRO) would play in conjunction with Indian startups

Ongoing Activities

The Ministry of Defence (MoD) has also undertaken various measures to attract startups to invest in the Defence and Space domain. For instance, the Technology Development Fund (TDF) Scheme, an MoD program executed by DRDO under the Make in India initiative, was set up to encourage MSMEs and startups to develop various defence technologies. Currently, six projects valued at INR 33.1 crores have been allotted to six startups under this scheme. Of the six, one project is in the space technology domain and has been awarded to two startups. It must be noted that the government launched the Indian Space Association (ISpA) in 2021. ISpA is a private industry body that aims to boost space technology in India. In addition, the government also allocated INR 13.7K crores to the space sector in the Union Budget 2022.

Currently, India accounts for only about 2% of the space economy. However, with recent policy initiatives and private sector participation, the Indian space sector is expected to change dramatically and capture a larger share of the global space economy, which accounted for US$ 447 billion in 2020.

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