Foreign investment in the establishment and operation of satellites is subject to government approval (no foreign ownership restriction apply). In February 2024, India liberalised its FDI policy in the space sector by removing prior government screening requirements for the establishment and operation of satellites and categorising activities related to satellites manufacture and operation. The new policy allows up to 74% foreign ownership via the automatic route in satellite manufacturing, operations, satellite data products, and ground/user segments. It further permits 100% FDI via automatic route for manufacturing of satellite components and systems, and up to 49% for launch vehicles and spaceport operations.
"5.2.12 SPACE SECTOR
Sector/Activity  | Sectoral Cap | Entry Route
5.2.12.1
(1) Satellites-Manufacturing & Operation | 100% | Up to 74%: Automatic, Beyond 74%: Government route
(2) Satellite Data Products
(3) Ground Segment & User Segment
5.2.12.2
(1) Launch Vehicles and associated systems or subsystems | 100% | Up to 49%: Automatic | Beyond 49%: Government route
(2) Creation of Spaceports for launching and receiving Spacecraft
5.2.12.3
Manufacturing of components and systems/ sub-systems for satellites, ground segment and user segment | 100% | Up to 100%: Automatic
5.2.12.4 The investee entity shall be subject to sectoral guidelines as issued by Department of Space from time to time.
5.2.12.5 Definitions:
(1) Satellites — Manufacturing & Operation: End-to-end manufacturing and supply of satellite and/or payload, establishing the satellite systems including control of in-orbit operations of the satellite & payloads.
(2) Satellite Data Products: Reception, generation or dissemination of earth observation/remote sensing satellite data and data products including Application Interfaces (API).
(3) Ground Segment & User Segment:
(a) Ground Segment: Supply of satellite transmit/receive earth stations including earth observation data receive station, gateway, teleports, satellite Telemetry, Tracking and Command (TTC) station, Satellite Control Centre (SCC), etc.
(b) User Segment: Supply of user ground terminals for communicating with the satellite, which are not covered under the ground segment.
(4) Launch Vehicles and Associated Systems or Subsystems: A vehicle and its stages or components that is designed to operate in or place spacecraft with payloads or persons, in a suborbital trajectory, earth orbit or outer space.
(5) Creation of Spaceports for launching and receiving Spacecraft: A spaceport (also referred as launch site) can be regarded as the base from which spacecraft are launched, and consisting of facilities involving devices for transportation to, from and via outer space.
(6) Manufacturing of Components and Systems/Subsystems for Satellites ground segment and user segment: Comprises the manufacturing and supply of the electrical, electronic and mechanical components systems/ subsystems for satellites, ground segment and user segment." (Government of India/Ministry of Commerce and Industry (2020), Consolidated FDI Policy (Effective from October 15, 2020), as amended March 2024)
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"CHAPTER 3: GENERAL CONDITIONS ON FDI [...]
3.4   ENTRY ROUTES FOR INVESTMENT 3.4.1 Investments can be made by non-residents in the equity shares/fully, compulsorily and mandatorily convertible debentures/fully, compulsorily and mandatorily convertible preference shares of an Indian company, through the Automatic Route or the Government Route. Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment. Under the Government Route, prior approval of the Government of India is required. Proposals for foreign investment under Government Route, are considered by respective Administrative Ministry/Department. 
[...]
3.5   CAPS ON INVESTMENTS
3.5.1 Investments can be made by person resident outside India in the capital of a resident entity only to the extent of the percentage of the total capital as specified in the FDI policy. The caps in various sector(s) are detailed in Chapter 5 of this Circular. 
3.6   ENTRY CONDITIONS ON INVESTMENT
3.6.1 Investments by non-residents can be permitted in the capital of a resident entity in certain sectors/activity with entry conditions. Such conditions may include norms for minimum capitalization, lock-in period, etc. The entry conditions in various sectors/activities are detailed in Chapter 5 of this Circular.
[...]
5.2 PERMITTED SECTORS
a) In the following sectors/activities, FDI up to the limit indicated against each sector/activity is allowed, subject to applicable laws/regulations; security and other conditionalities. In sectors/activities not listed below, FDI is permitted up to100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities. [...]
c) Foreign investment in sectors under Government approval route resulting in transfer of ownership and/or control of Indian entities from resident Indian citizens to nonresident entities will be subject to Government approval. Foreign investment in sectors under automatic route but with conditionalities, resulting in transfer of ownership and/or control of Indian entities from resident Indian citizens to non-resident entities, will be subject to compliance of such conditionalities. 
[...]
5.2.12 SATELLITES- ESTABLISHMENT AND OPERATION
Sector/Activity | % of Equity/FDI Cap | Entry Route
Satellites- establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO | % of Equity/FDI Cap: 100% | Entry Route: Government .[...]" (Government of India/Ministry of Commerce and Industry (2020), Consolidated FDI Policy (Effective from October 15, 2020))
Press release, Cabinet approves amendment in the Foreign Direct Investment (FDI) policy on Space Sector, February 21, 2024
Government of India/Ministry of Commerce and Industry (2020), Consolidated FDI Policy (Effective from October 15, 2020)
[<a href="https://pib.gov.in/PressReleseDetail.aspx?PRID=2007865&reg=3&lang=1">Press Release</a>],[<a href="https://pib.gov.in/PressReleasePage.aspx?PRID=2011523">Pres Release</a>],[<a href="https://dpiit.gov.in/sites/default/files/FDI-PolicyCircular-2020-29October2020_0.pdf">Policy</a>],[<a href="https://www.lexology.com/library/document?tk=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzUxMiJ9.eyJleHAiOjE3NDI1NzMxNjgsImRhdGEiOnsiRG9jdW1lbnRHdWlkIjoiMThiYjJiOWEtMGQ0YS00ODdhLWFmNDQtODFkMWQzNDBjOTE2IiwiQ29udGFjdEd1aWQiOiIwMDAwMDAwMC0wMDAwLTAwMDAtMDAwMC0wMDAwMDAwMDAwMDAiLCJCeXBhc3NMb2dpbiI6dHJ1ZX19.vAvtx06IGe1SxTUDSd4NpSkyauXrU22tvClHdwtVZ_WxuJkWGbqjakOAfK_ciLe2OG9-NutO6_OFAyGapv6w4A">Other</a>]