FDI in India’s space sector is permitted up to 74% under the automatic route for satellite manufacturing and operation, up to 49% under the automatic route for launch vehicles and spaceports, and up to 100% under the automatic route for manufacturing of satellite components. Beyond these thresholds, government route approval applies, following Press Note 3 (2024 Series).
Table 1: Key facts on FDI in India’s space sector
| Parameter | Position | Source |
|---|---|---|
| Satellite manufacturing and operation — automatic route | Up to 74% | Press Note 3 (2024 Series), DPIIT |
| Satellite manufacturing and operation — beyond 74% | Government route up to 100% | Press Note 3 (2024 Series), DPIIT |
| Launch vehicles and associated systems, spaceports — automatic route | Up to 49% | Press Note 3 (2024 Series), DPIIT |
| Launch vehicles and spaceports — beyond 49% | Government route up to 100% | Press Note 3 (2024 Series), DPIIT |
| Manufacturing of satellite components/systems/ground segment/user segment | Up to 100% automatic | Press Note 3 (2024 Series), DPIIT |
| Sector policy framework | Indian Space Policy, 2023 | Department of Space |
| Sector regulator | Indian National Space Promotion and Authorisation Centre (IN-SPACe) | Indian Space Policy, 2023 |
| Effective date of space FDI framework | 2024 | Press Note 3 (2024 Series), DPIIT |
What Changed in 2026
- Press Note 3 (2024 Series) remains the governing framework for space sector FDI, with no further threshold changes announced as at February 2026.
- IN-SPACe continues to build out its authorisation processes for private and foreign-funded space activities, which run alongside, but separately from, the FEMA/FDI approval process.
Why does the space sector have three different FDI thresholds?
The space sector’s FDI framework, introduced by Press Note 3 (2024 Series), splits activities into three categories because satellite manufacturing, launch operations, and component manufacturing carry different strategic sensitivities and different levels of existing private-sector participation globally. Component manufacturing, seen as the least strategically sensitive and most import-substitution-friendly, was opened to 100% automatic-route FDI, while launch vehicles and spaceports, seen as the most strategically sensitive given their dual-use potential, received the lowest automatic threshold at 49%.
This tiered structure followed the broader liberalisation of India’s space sector under the Indian Space Policy, 2023, which for the first time allowed private and foreign-funded entities to undertake end-to-end space activities previously reserved for the Indian Space Research Organisation and its affiliated public sector entities. The FDI framework operationalises this policy shift by defining exactly how much foreign ownership each activity category can absorb without case-by-case government review.
What activities fall under each space sector FDI category?
Satellite manufacturing and operation covers the design, manufacture, assembly, integration and operation of satellites, along with satellite-based data products and value-added services, capped at 74% automatic. Launch vehicles and associated systems, along with the creation of spaceports for launch and re-entry operations, are capped at 49% automatic given their higher strategic sensitivity. Manufacturing of components and systems or sub-systems for satellites, ground segment and user segment, such as ground stations and user terminals, is open to 100% automatic-route FDI, reflecting the government’s intent to build a domestic space supply chain.
Table 2: Space sector FDI categories and thresholds in India
| Activity category | Automatic route limit | Beyond limit | Source |
|---|---|---|---|
| Satellite manufacturing and operation, data products | 74% | Government route up to 100% | Press Note 3 (2024 Series), DPIIT |
| Launch vehicles and associated systems | 49% | Government route up to 100% | Press Note 3 (2024 Series), DPIIT |
| Creation of spaceports for launch/re-entry | 49% | Government route up to 100% | Press Note 3 (2024 Series), DPIIT |
| Manufacturing of satellite/ground/user segment components | 100% | Not applicable | Press Note 3 (2024 Series), DPIIT |
What is the role of IN-SPACe alongside FEMA compliance?
The Indian National Space Promotion and Authorisation Centre (IN-SPACe) authorises private and foreign-funded entities to undertake space activities under the Indian Space Policy, 2023, and this authorisation is a separate requirement from FEMA’s FDI entry-route compliance. A foreign-funded space company must obtain IN-SPACe authorisation for its specific space activity in addition to complying with the applicable FDI threshold and reporting requirements.
IN-SPACe’s authorisation process examines the technical capability, safety protocols and orbital/spectrum coordination aspects of a proposed space activity, which is a different evaluation from the strategic and security review conducted for government-route FDI approvals. Both processes typically run in parallel for a foreign-funded entity planning satellite manufacturing or launch operations in India.
Table 3: Process for FDI entry into India’s space sector
| Step | Action | Responsible party | Statutory deadline | Form/Portal | Typical TAT |
|---|---|---|---|---|---|
| 1 | Determine activity category and applicable FDI threshold | Foreign investor and Indian counsel | Not applicable | Not applicable | Not applicable |
| 2 | Apply for IN-SPACe authorisation for the specific space activity | Indian entity | Not applicable | IN-SPACe portal | Varies by activity (indicative) |
| 3 (if government route) | File FDI application on NSWS portal | Foreign investor / Indian entity | Not applicable | NSWS portal (SWAGAT-FI) | Weeks to months |
| 4 | Remit funds and allot shares | Foreign investor / Indian entity | Within 60 days of receipt of funds | Banking channel, board resolution | Within 60 days |
| 5 | Report FDI on FIRMS portal | Indian entity | Within 30 days of allotment | Form FC-GPR | 30 days |
| 6 | Commence space activity under IN-SPACe authorisation conditions | Indian entity | Ongoing | IN-SPACe compliance | Ongoing |
Key insights and information
Investors often assume the space sector is uniformly government-route because of its historical association with strategic and defence-adjacent activity, but the 2024 framework actually opens meaningful automatic-route headroom, particularly for component manufacturing at 100% and satellite manufacturing up to 74%. Classifying the intended activity correctly at the outset, rather than defaulting to a government-route assumption, can materially shorten the entry timeline.
Because IN-SPACe authorisation and FDI approval are assessed by different bodies against different criteria, an investor should not assume that securing one automatically expedites the other; parallel-tracking both processes from the outset, with a single coordinated application timeline, tends to produce a faster overall market entry than pursuing them sequentially.
Table 4: Penalties and cure for space-sector FDI non-compliance
| Default | Provision | Exposure | Regularisation route |
|---|---|---|---|
| FDI exceeding automatic-route threshold without government approval | Press Note 3 (2024 Series), DPIIT | Contravention of FEMA | Compounding application to RBI |
| Space activity conducted without IN-SPACe authorisation | Indian Space Policy, 2023 | Regulatory action; risk to continued operations | Retrospective authorisation application to IN-SPACe |
| Delayed FIRMS reporting of equity infusion | FEMA Master Direction on Reporting | Late Submission Fee | Pay LSF through FIRMS portal |
Frequently Asked Questions
Can a foreign company own 100% of an Indian satellite manufacturing business?
A foreign company can own up to 74% of an Indian satellite manufacturing and operation business under the automatic route, and up to 100% through the government route where approved. Component manufacturing for satellites, by contrast, is open to 100% FDI under the automatic route without needing government approval.
What FDI cap applies to a company building rockets or launch vehicles in India?
A company manufacturing launch vehicles or associated systems can receive up to 49% foreign investment under the automatic route, with any amount beyond that requiring government route approval. This is the most restricted automatic-route threshold among the three space sector categories.
Is IN-SPACe authorisation required in addition to FDI approval for space activities?
Yes, IN-SPACe authorisation under the Indian Space Policy, 2023 is required for any private or foreign-funded entity undertaking space activities in India, separate from and in addition to the FDI entry-route compliance under FEMA. Both processes must be satisfied independently.
Can a foreign investor build a spaceport in India?
Yes, a foreign investor can invest in the creation of a spaceport in India up to 49% under the automatic route, with government route approval required for foreign ownership beyond that threshold. This falls under the same category as launch vehicles for FDI purposes.
What space sector activities are open to 100% automatic FDI in India?
Manufacturing of components and systems for satellites, ground segment equipment such as ground stations, and user segment equipment such as user terminals are open to 100% automatic-route FDI. This is the most liberalised category within the space sector FDI framework.
When was the current space sector FDI policy introduced in India?
The current space sector FDI framework was introduced by Press Note 3 (2024 Series), issued by the Department for Promotion of Industry and Internal Trade, following the broader liberalisation under the Indian Space Policy, 2023. It remains the operative framework as at February 2026.
Does India allow foreign ownership of satellite data and imaging services?
Yes, satellite-based data products and value-added services fall within the satellite manufacturing and operation category, permitting up to 74% foreign ownership under the automatic route and up to 100% under the government route. This reflects the same threshold applicable to satellite manufacturing itself.
Can a foreign-owned Indian space company export satellites or launch services?
Exporting satellites or launch services from India involves separate export control and end-use clearances administered by the Department of Space and related authorities, distinct from the FDI approval and IN-SPACe authorisation. Investors planning export-oriented operations should factor in this additional clearance layer.
How does the space sector FDI framework compare to the defence sector framework?
Both frameworks use a tiered automatic/government-route structure, but the space sector has three distinct activity categories with different thresholds (49%, 74% and 100%), while defence uses a single 74%/100% split. The space framework is also considerably newer, dating only to 2024.
Is there a minimum capital requirement for space sector FDI in India?
There is no general minimum capital threshold specifically prescribed for space sector FDI under the NDI Rules, though IN-SPACe’s authorisation process may assess financial capability as part of its technical and safety review. Capital adequacy in this context is evaluated by IN-SPACe rather than fixed as an FDI rule.
Can an existing ISRO vendor convert into a foreign-funded private space company?
Yes, an existing vendor to the Indian Space Research Organisation can restructure to accept foreign investment, subject to the same activity-based FDI thresholds and IN-SPACe authorisation requirements applicable to any other private space sector entity. Prior vendor status does not itself change the applicable FDI framework.
Sources
- Press Note 3 (2024 Series) — DPIIT, space sector FDI framework.
- Indian Space Policy, 2023 — Department of Space, Government of India.
- FEMA (Non-Debt Instruments) Rules, 2019 — Department of Economic Affairs.
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax or investment advice. Foreign investors should consult a qualified professional before acting on any information in this article. CompanyIN and its contributors accept no liability for decisions made on the basis of this content.
