NEW DELHI: The government’s decision to ease foreign direct investment (FDI) in the space sector will help attract foreign companies as well as start-ups and will also increase the demand for high-tech jobs, experts say. To tell.
The government has relaxed FDI norms in the sector by allowing 100% foreign investment in the manufacturing of satellite components, as part of efforts to attract foreign players and private companies to the sector.
This provision was notified last month.
Sreeram Anantasayanam, Partner, Deloitte India, said the recent amendment to increase FDI cap in the space sector is an important step towards transforming India’s space program in terms of infrastructure development.
“For the private sector, this opens the door to new business opportunities, leveraging private investment to strengthen space capabilities, access cutting-edge technology to accelerate and develop next-generation space products, and connect with global companies. It provides an opportunity to collaborate,” Anantasayanam said.
For the government, it will reduce the financial burden of using funds to enable India’s space ecosystem, he said.
“This burgeoning space industry will create high demand for high-tech jobs for engineers, scientists, and other skilled professionals. Efforts by government agencies and academic institutions will expand the talent pool to meet demand. will further foster innovation and advance India’s space travel ambitions,” Anantasayanam added.
He also said that manufacturing of subsystems related to launch vehicles, satellites and ground stations by the private sector will find a direct source of revenue for upcoming missions for the Indian Space Research Organization (ISRO) and other space programs around the world. He said it would be.
He said the country currently has around 200 space start-up companies registered with the Department for Promotion of Industry and Intratrade (DPIIT), some of which have demonstrated excellent capabilities in this field.
But the space field presents unique challenges, including technical complexity and long concept times, he said.
“Significant investments are essential to further strengthen the space ecosystem and enable more Indian startups to establish themselves. These investments will not only foster innovation and technological advancement; It will create a suitable environment for the growth of India’s space industry,” Anantasayanam said.
He further said that the few manufacturers who are supporting ISRO by supplying components in built-to-specification and printed models have already employed thousands of people and generated revenues of over billions.
He added: “For this sector to truly expand, the number of such companies needs to reach at least double digits.”
Revathy Muralidharan, Partner, IndusLaw, said that with increasing competition due to the entry of new players and strategic investors, domestic players are looking to develop cutting-edge and competitive technologies to maintain their position in the Indian space market. He said he would be forced to develop it.
He added that opening up the sector to foreign investors will also bring much-needed liquidity to capital-intensive industries and will certainly help private companies compete on a global scale.
This decision will ensure that India’s space sector will see FDI inflows primarily from two groups of investors: strategic investors and private equity players.
Iqbal Khan, partner at Shardul Amarchand Managardas & Company, said increasing private sector participation is essential to develop commercial opportunities and create jobs.
“The liberalized FDI norms will enhance opportunities for domestic companies looking to launch their own constellations of satellites that will enable communication systems and real-time monitoring and surveillance,” Khan said.
issued May 5, 2024, 08:07 IST