Government eases approval process for foreign direct investment in aerospace sector

India will allow 100% foreign direct investment in the manufacturing of satellite systems without official approval and relax launch vehicle rules in an effort to expand its share of the global space market, a government statement said.

India’s space ambitions have grown when in August this year it became the first country to land a spacecraft near the unexplored south pole of the moon and the fourth country to achieve a soft landing, just days after Russia A similar mission failed.

Foreign companies can invest up to 100% in the manufacturing of satellite components and systems or subsystems without approval, the government said in a statement late Wednesday.

Foreign companies planning to build satellites in India do not require government approval for up to 74% of the investment; for investment in launch vehicles, the investment ratio may be as high as 49% without approval, the statement said.

India has privatized space launches and plans to increase its share of the global launch market fivefold, with some predicting the market will be worth $47.3 billion by 2032. India currently accounts for about 2% of the space economy.

The country hopes liberalized rules for the long government-controlled space industry will draw interest from companies including Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin .

The Indian government said in a statement that the foreign direct investment policy reforms are expected to boost employment and allow companies to set up manufacturing facilities in India.

“This will enable India to access the latest technological advancements and much-needed funding, not only from the country but also from international investors,” said AK Bhatt, director general of the Indian Space Society.

Space-related Indian stocks including Paras Defense and Space Technologies, MTAR Technologies, Taneja Aerospace and Aviation and Apollo Micro Systems rose between 2% and 5% on Thursday.

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