How the New FDI Policy Could Benefit Indian Space Startups?

The Indian National Space Promotion and Authorisation Centre (INSPACe) is finalizing a groundbreaking Foreign Direct Investment (FDI) policy for space startups, its Chairman, Pawan Goenka said in a Public Address.

How will the new FDI Policy help Indian Space Startups? 

INSPACe, the newly established organization under the Department of Space in the Indian government, is set to launch the new FDI policy exclusively designed for space startups in the near future.

Goenka asserts that the policy, which has been unanimously agreed upon, is a well-balanced approach aimed at fostering growth opportunities for Indian companies. Simultaneously, it will enable foreign companies to actively participate by bringing in crucial investments and advanced technologies.

Goenka shared these insights during the Spacecraft Mission Operations (SMOPS-2023) international conference organized by the Indian Space Research Organization (ISRO) in Bengaluru.

Addressing FDI Constraints

Highlighting the existing FDI constraints in the space sector, Goenka acknowledged that numerous startups face challenges in securing investments for their expansion plans. He mentioned that foreign companies interested in growing their business within the Indian space sector encounter obstacles due to the prevailing FDI policy.

“The policy has been defined, it has been agreed to by all and I believe that it is a very good, balanced policy that is directed towards creating opportunity for growth for Indian companies and at the same time allowing foreign companies to come in and play a major role both in terms of bringing technology and bringing investment. Under the new space policy, nothing is off-limits for the private sector. This is the primary objective of the policy. Building satellites and rockets, owning space assets, delivering commercial service, creating infrastructure… Many foreign companies who want to grow their business in the space sector in India are not able to do so due to the FDI policy. At present, all of this is under ISRO but the vision is that the private sector will come forward and play a major role in how the space sector moves forward in India,” Goenka said at the Spacecraft Mission Operations (SMOPS-2023) international conference. 

Despite having a rich history of 60 years, Goenka emphasized that the space sector in India still retains its potential as a sunrise industry.

What will the role of ISRO be in the Space Policy? 

Under the new space policy crafted by the Government of India (GoI), the Indian Space Research Organization's (ISRO) role will shift towards research activities and supporting private enterprises. This transition will involve collaborative technology transfer to empower private entities.

What opportunities does the New Space Policy have for Startups? 

The policy has a simple aim - to make India a leader in the space industry. To achieve this, the government is inviting startups to join hands with ISRO and create innovative products and services that can be used in space exploration.

The policy aims to foster a culture of innovation and entrepreneurship in the country's space sector, while also focusing on increasing the number of satellite launches and promoting space research and development. 

One of the most exciting aspects of this policy is the opportunities it will provide for startups. With the aim of encouraging more private sector participation in the space industry, the government has laid out a number of incentives for startups, including financial support, access to ISRO's facilities, and the opportunity to work on joint projects with ISRO.

The primary objective of the new space policy is to provide the private sector with boundless opportunities. It encompasses various domains, such as satellite and rocket manufacturing, space asset ownership, commercial services, and infrastructure development. Currently, ISRO oversees all these aspects, but the vision is to encourage the private sector to emerge as a major driving force in shaping India's space sector.

The forthcoming FDI policy for Indian space startups, devised by INSPACe, is expected to revolutionize the industry by unlocking growth potential and attracting foreign investments. With the government's emphasis on promoting the private sector's involvement and transferring advanced technology, the space sector in India is poised for a remarkable transformation.