Cabinet Approves 100% FDI in Space Sector; Shares Rally

Space-related stocks rose intraday on February 22, 2024, after the government approved 100 percent FDI in the space sector.

The Union Cabinet chaired by Prime Minister Shri Narendra Modi approved the amendment in the Foreign Direct Investment (FDI) policy on the space sector. Now, the satellite sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector, according to a press release by the Ministry of Commerce & Industry.

The Indian Space Policy 2023 was notified as an overarching, composite, and dynamic framework to implement the vision for unlocking India’s potential in the Space sector through enhanced private participation. The said policy aims to augment space capabilities; develop a flourishing commercial presence in space; use space as a driver of technology development and derived benefits in allied areas; pursue international relations and create an ecosystem for effective implementation of space applications among all stakeholders, it said.

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It further said the proposed reforms seek to liberalize the FDI policy provisions in the space sector by prescribing liberalized entry routes 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.

At 2:45 PM, the share price of MTAR Technologies and Data Patterns gained over 5 percent each. Apollo Micro Systems and Azad Engineering added 5 percent while Paras Defence was up 3 percent. Hindustan Aeronautics and L&T were up 1.5 percent each.

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