India will allow 100% FDI in manufacturing “components and systems or subsystems for satellites” without official approval, a government statement released on Wednesday evening said.

The new FDI rules seek to attract more businesses from abroad to invest in Indian companies in the space sector. News of the change in legislation comes after the country’s Chandrayaan-3 mission successfully landed near the unexplored south pole on the moon in August last year, heralding a new era for New Delhi’s ambitions in space.

In addition, foreign investors can access up to 74% of activities in the manufacturing of satellites, satellite data products, as well as ground and user segments, without official approval. However, the Indian state will retain majority control (51%) over activities relating to the launch of vehicles or associated systems and subsystems in space and in the creation of spaceports.

“This will give India access to the latest tech advances and much-needed funds not only from the country but from international investors too,” Lt Gen A K Bhatt (retired), director-general of the Indian Space Association, said.

Space launches and activities used to be the sole domain of governments and space and defence giants. However, the recent rise of the private sector in the field has focused attention on a new phenomenon called “the space economy”, which involves the increasing commercialisation of space activities and exploration.

According to market data cited by GlobalData, the space economy is set to grow from $450m in 2022 to anywhere between $760bn and $1trn by 2030.

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Among the companies benefitting the most will be equipment manufacturers of launchers and satellites, as well as space applications within the communications and navigation sectors.

Founded in 1980, the Indian Space Research Organisation owns the world’s largest constellation of remote-sensing satellites.