New Delhi: The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday gave its go-ahead for the amendment in the Foreign Direct Investment (FDI) policy for the space sector, allowing up to 100 percent FDI in the space sector.

The FDI policy reform will enhance Ease of Doing Business in the country, leading to greater FDI inflows and thereby contributing to growth of investment, income and employment, said the Cabinet note.

The proposed reforms seek to liberalize the FDI policy provisions in space sector by prescribing liberalized entry route and providing clarity for FDI in Satellites,  Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft and manufacturing of space related components and systems.

Under the amended FDI policy, 100% FDI is allowed in space sector. The liberalized entry routes under the amended policy are aimed to attract potential investors to invest in Indian companies in space, it added.

The satellites sub-sector has been divided into three different activities — Launch Vehicles, Satellites and Satellite Components. Under the amended policy, up to 49 per cent FDI is allowed in launch vehicles, 74 per cent in satellites, and 100 per cent in satellite components.

“As per the existing FDI policy, FDI is permitted in establishment and operation of Satellites through the Government approval route only.  In line with the vision and strategy under the Indian Space Policy 2023, the Union Cabinet has eased the FDI policy on Space sector by prescribing liberalized FDI thresholds for various sub-sectors/activities,” the cabinet note said.