FDI Liberalisation To Propel More Space Missions Like Gaganyaan: Experts

Prime Minister Narendra Modi on Tuesday unveiled the names of the four astronauts who will be part of India’s first human space flight program, Gaganyaan, slated to be launched in 2024-25.

The four chosen Indian Air Force pilots are Group Captain Prashanth Nair, Group Captain Ajit Krishnan, Group Captain Angad Pratap and Wing Commander Shubhanshu Shukla. The four astronauts were trained at Yuri Gagarin Cosmonaut Training Center in Russia.

As per ISRO, the Gaganyaan project envisages a demonstration of human spaceflight capability by launching a crew of three members to an orbit of 400 km for a three-day mission and bringing them back safely to earth, by landing in Indian sea waters.

Day after, the PM inaugurated three space infrastructure projects worth about Rs 1800 crore including the PSLV Integration Facility (PIF) at the Satish Dhawan Space Centre, New ‘Semi-cryogenics Integrated Engine and Stage Test Facility’ at ISRO Propulsion Complex and ‘Trisonic Wind Tunnel’ at the Vikram Sarabhai Space Centre (VSSC).

“India’s success in the space sector is sowing the seeds of scientific temperament in the country’s young generation,” PM Modi said in his address at the VSSC.

Lt Gen AK Bhatt (Retd), Director General of the Indian Space Association, said that India’s strategic investment in additional spaceports will position the nation to significantly enhance its launch service capabilities, fostering greater international collaboration and solidifying its status as a global space power.

This all comes a few days later when the government decided to liberalise Foreign Direct Investment (FDI) policies. Under the amended FDI policy, 100 per cent FDI is allowed in the space sector. The liberalised entry routes under the amended policy are aimed at attracting potential investors to invest in Indian companies in space.

Up to 74 per cent, FDI will be allowed under the automatic route in satellite manufacturing and operation, satellite data products and ground segment and user segment.

Launch vehicles and accompanying equipment or subsystems, as well as the development of spaceports for launching and receiving spacecraft, can account for up to 49 per cent under the Automatic route. More than 49 per cent of these activities are typically carried out by governments.

However, even before the FDI policy change, the Indian Space sector has been receiving significant interest from investors, both domestic and foreign in recent years, according to Sanchit Agarwal, Partner, Khaitan & Co.

Agarwal said that the Indian Spacetech startups have raised more than USD 285 million and the larger players in the industry that have received substantial investments until the end of 2023 have been Skyroot Aerospace (USD 95 million), Pixxel (USD 71 million) and Agnikul Cosmos (USD 40 million).

According to Agarwal, the Indian space-tech companies have received investments from multiple foreign companies and investors, including Investors such as Kalaari Capital, Peak XV Partners, Blume Ventures, Google, Omidyar Network India, GIC (Government of Singapore Investment Corporation), Baring Private Equity Partners India, Lightspeed etc.

“The amendment is expected to attract more foreign investment in this capital-intensive sector from globally established funds and investors, which will further accelerate the growth of India’s space-tech industry and position the country as a key player in the global space race. Particularly, this liberalisation is also expected to add growth to the other sectors, that have downstream applications from the space-tech sectors, such as Agriculture (for precision farming and atmosphere analysis), Infrastructure and Urban Monitoring (towards management of traffic, disasters, environmental monitoring), Climate-tech (for analysis of global warming impact, including sea level analysis, weather prediction, glacial monitoring etc.),” Agarwal added.

In 2023, in a stellar display of prowess, India soared to new heights with the successful soft landing of Chandrayaan-3 on the South Pole of the Moon and the successful launch of Aditya-L1, India’s first solar mission. These milestones not only secured India’s standing in the global space economy but also fueled the engines for the private space sector in India.

Among other feats, India now aims to set up a space station by 2035 and send the first Indian to the moon by 2040.