India's new FDI rule may be a blessing for Elon Musk's SpaceX; here's how - Hindustan Times

India's new FDI rule may be a blessing for Elon Musk's SpaceX; here's how

ByVaishnawi Sinha
Feb 23, 2024 11:12 AM IST

India has given the go ahead for 100% foreign direct investments in the space sector, paving way for Elon Musk's SpaceX in the country.

The Centre, in a recent statement, said that India will now allow 100 percent foreign direct investment in the manufacturing of satellite systems without official approval. This step has been taken by the Indian government in order to get a greater share of the global space market.

Elon Musk's Starlink can enter Indian market through Centre's new rule(Reuters file photo)
Elon Musk's Starlink can enter Indian market through Centre's new rule(Reuters file photo)

The Indian government said in a statement on Wednesday that foreign companies now have the option of investing in the manufacturing of satellite parts and components up to 100 percent without approval, which can be a blessing for Elon Musk's Starlink and SpaceX.

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Starlink has been trying to enter the Indian market for several years, but is bound by the US privacy law when it comes to presenting the proper identification of its investors. This new policy by India can now help Elon Musk's firm make direct investments in Indian space sector, without immediate approval.

India's space ambitions got a boost when it became the first country to land a spacecraft near the unexplored south pole of the moon in August - and the fourth to achieve a soft landing - just days after a similar Russian mission failed.

Through this new policy, foreign firms like Elon Musk's SpaceX and Jeff Bezos' Blue Origin, would not require government approval up to 74% of the investment; for investment in launch vehicles, investment could go up to 49% without such approval.

However, the new FDI policy by India will only grant these firms the access to make direct investments for manufacturing. Starlink, on the other hand, is seeking to launch its own satellite via SpaceX for India to provide its internet services across the country, which still requires proper approval.

The announcement of this new policy also showed its impact on the stock market. Space-related India stocks such as Paras Defence and Space Technologies , MTAR Technologies, Taneja Aerospace and Aviation and Apollo Micro Systems climbed 2% to 5% on Thursday.

Why Starlink is facing problems in India

Starlink, as per multiple media reports, was in the final stages of getting a license to operate in India. However, Indian investment rules stated that a company has to declare that none of its investors share a land border with India before making an investment in the country.

Starlink remained firmly against the foreign investment rules, stating that US privacy laws bar the company from making a full disclosure regarding its shareholders.

(With inputs from Reuters)

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