Space sector poised to receive FDI flows
New Delhi, May 5: The government’s decision to ease foreign direct investment (FDI) in the space sector will help attract foreign players as well as start-ups and will boost demand for high-tech jobs, experts say.
The government has eased FDI norms in the sector by allowing 100 per cent overseas investment in making components for satellites, as part of efforts to attract overseas players and private companies into the segment. The provisions were notified last month.
Sreeram Ananthasayanam,
partner, Deloitte India, said that the recent amendment of higher FDI limits in the space sector is a significant step towards transforming India’s space program, in terms of infrastructure development.
“For the private sector, it opens doors to new business opportunities, it presents an opportunity to leverage private investments to enhance space capabilities, access to cutting-edge technologies to accelerate and develop next-gen space products, and collaboration with global players,”
Ananthasayanam said.
For the government, it reduces the burden on public finances for its usage of funds to enable space ecosystem in India, he said.
“This burgeoning space industry will create a high demand for high-tech jobs for engineers, scientists, and other skilled professionals. The initiatives by government organisations, academic institutes will create the talent pool for meeting the demand will further fuel innovation and propel India's spacefaring ambitions,”
Ananthasayanam added.
Revathy Muralidharan, partner, IndusLaw, said the increased competition due to entry of new players and strategic investors will force the domestic players to develop cuttingedge, highly competitive technologies to keep up their positions in the Indian space market.
He added that opening up of the sector for foreign investors will also bring in the much needed liquidity into the capital intensive industry and will certainly help the private players to compete on a global scale.
FOR THE private sector, it opens doors to new business opportunities, it presents an opportunity to leverage private investments to enhance space capabilities.