India space sector FDI policy: entry routes and caps

In short

Since 16 April 2024, FDI in Indian space firms is automatic up to 74% (satellites), 49% (launch vehicles) and 100% (components); above that needs approval (PIB, DEA).

If a foreign fund, a strategic investor or a parent company wants to put money into your space startup, the first question is how much of your company it can own without asking the government. India's answer depends on what the company does. Satellites, launch vehicles and components sit in three different tiers. This page sets out each tier, where the rule comes from, and how to work out which tier your company is in.

1. What changed in 2024

Before 2024, the rule was tight. The Press Information Bureau (PIB) wrote on 21 February 2024 that "FDI is permitted in establishment and operation of Satellites through the Government approval route only".

The Union Cabinet approved a new policy on 21 February 2024. A Press Note of 4 March 2024 recorded it, according to an EY alert. The rule that matters in law is the gazette notification dated 16 April 2024 from the Department of Economic Affairs, which amended Schedule I of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. A Lok Sabha reply published by PIB on 12 March 2025 reproduces the new table, so the figures below have been repeated by the government after the rule took effect.

2. The three tiers

"100% FDI is allowed in space sector", PIB says, but for two of the three tiers only up to a lower cap is automatic. Above the cap you need government approval.

Activity	Total FDI allowed	Automatic route up to	Above that
Satellites: manufacturing and operation; satellite data products; ground segment and user segment	100%	74%	Government route
Launch vehicles and associated systems or sub-systems; creation of spaceports for launching and receiving spacecraft	100%	49%	Government route
Manufacture of components and systems or sub-systems for satellites, ground segment and user segment	100%	100%	Not needed

Automatic route means no prior approval is needed. Government route means the investment needs approval first.

Some summaries list spaceports in the 100% tier. The official table in the Lok Sabha reply puts spaceports in the launch vehicle row, at 49%.

3. Which tier is your company in?

Most startups sit in one row without much doubt. The rows that need care are the borders.

Satellite data and analytics. "Satellite data products" is in the 74% row. A company that sells imagery or analytics built on satellite data is likely to be read as this row, not the components row.
Ground segment. "Ground segment and user segment" is in the 74% row. Making the components and systems or sub-systems for the ground segment and user segment is in the 100% row.
Sub-systems. The wording splits by what the part is for. A sub-system made for a satellite or ground segment is in the 100% row. A system or sub-system for a launch vehicle is in the 49% row. A company that builds avionics or propulsion for both should ask a lawyer how its activity will be read.
Mixed companies. One company that makes satellite components and also operates a satellite has activities in two rows. The sources I opened do not say how the cap applies to a mixed company. Get advice before you set the cap table.

4. What the FDI rule does not do

The FDI rule sets who can own how much. It does not authorise you to run a space business. The EY alert notes that the investee company "should continue to adhere with the guidelines issued by Department of Space from time to time". The Indian Space Policy 2023 makes IN-SPACe the single-window agency for authorising space activities, which our page on IN-SPACe authorisation for space startups covers in full.

The change sits inside the Indian Space Policy 2023. PIB describes that policy as the overarching framework for more private participation, and says the Department of Space consulted ISRO, IN-SPACe, NSIL and industry before the FDI change.

5. Before you take foreign money

[ ] Write one sentence on what the company does and match it to a row in the table.
[ ] If you are in a capped row, check the foreign share after the round against the cap, and ask your lawyer how options and convertible notes are counted.
[ ] Plan the timeline for approval if your target is above the cap. The sources I opened give no processing time, so ask your lawyer.
[ ] Check that your IN-SPACe authorisation and any Department of Space conditions are in place or in progress.
[ ] Look for later amendments before you sign. The newest official source I opened is the March 2025 reply, and I did not find a later change.

Take advice from a securities or FEMA lawyer before you close the round.

Questions people ask

Is 100% FDI allowed in Indian space companies?

Yes, in the sense that the rules allow up to 100% foreign ownership in each tier. It is automatic only up to 74% for satellites and 49% for launch vehicles. Beyond those figures you need approval. For components it is automatic at 100%.

What changed on 16 April 2024?

The gazette notification of that date substituted a new space-sector entry in Schedule I of the FEMA Non-Debt Instruments Rules, 2019, with the three tiers above.

Are spaceports in the 100% tier?

Not in the official table. The Lok Sabha reply and the PIB release of 21 February 2024 put the creation of spaceports with launch vehicles, at 49% automatic.

Does a foreign investor need approval to buy 40% of a launch startup?

No, as 40% is under the 49% automatic cap for launch vehicles. Above 49% the government route applies.