India has updated its foreign direct investment (FDI) regulations in the space sector, in a strategic move to attract more international investors. This revision comes four years after the sector was opened to private players, and it could potentially spark a surge of global interest in the South Asian space community.

What Happened: As reported by TechCrunch, the Indian cabinet, under the leadership of Prime Minister Narendra Modi, endorsed an amendment to its FDI norms on Wednesday. This amendment allows for a significant increase in overseas investment in the space sector, in some cases up to 100%. The Indian government has categorized three different sectors under the revised policy, with foreign investments exceeding the specified thresholds necessitating government approval.

In 2020, the Indian government initiated its space sector reforms and established the Indian National Space Promotion and Authorization Center. This new agency was created to facilitate private companies in utilizing the resources and infrastructure of the Indian Space Research Organisation (ISRO).

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India also launched its space policy last year, outlining guidelines and rules for private participation. The country replaced its century-old rules with a new telecom act to pave the way for global satellite-based broadband service providers, including Elon Musk's Starlink.

Currently, India boasts approximately 190 space tech startups. Investments in these startups exceeded $124 million last year, as per government data. The country's space economy is expected to hit $44 billion by 2033.

The Indian Space Association, comprising space tech startups and private companies, expects the revised FDI norms to significantly enhance India's stake in the global space economy, which currently stands at just over 2%.

Why It Matters: The revision of FDI norms is a strategic move by the Indian government to attract more international investors and boost the country’s presence in the global space economy. The establishment of the Indian National Space Promotion and Authorization Center and the introduction of the new space policy are key steps towards this goal. The updated FDI norms could potentially lead to a surge in global interest and investment in the Indian space sector, further propelling the growth of the country’s space economy.

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