India’s Space Economy: Authorisation, FDI and the Business Model
Current position
The Indian Space Policy, 2023 assigns promotional and authorisation functions to IN-SPACe for non-government entities. The 2024 FDI policy permits up to 74% automatic-route investment for satellite manufacturing and operation, satellite data products and ground or user segments; up to 49% automatic route for launch vehicles and spaceports; and up to 100% automatic route for components and systems, with government approval beyond specified caps.
How it works
A space company may need IN-SPACe authorisation, spectrum or telecom permissions, remote-sensing or geospatial compliance, import/export licences and local safety approvals.
Revenue models differ: launch services, satellite capacity, data subscriptions, imagery analytics and component sales should not be compared using one order-book metric.
An order book is not recognised revenue. Milestones, launch success, insurance, customer acceptance and foreign exchange affect cash conversion.
| Issue | Current position | Why it matters |
|---|---|---|
| Policy gateway | IN-SPACe authorisation | Activity-specific approval remains essential |
| Satellite segment FDI | Up to 74% automatic route | Government route beyond cap |
| Launch/spaceport FDI | Up to 49% automatic route | Government route beyond cap |
Practical example
A satellite-data company raises foreign capital under the automatic route but assumes that FDI permission authorises earth-observation operations. It still needs the relevant IN-SPACe and other approvals, spectrum or data compliance and export-control review. Corporate funding and operational permission are separate gates.
Action checklist
- Map the exact activity and required IN-SPACe authorisation.
- Check FDI sector, beneficial ownership and route before investment.
- Identify spectrum, telecom, remote-sensing and export-control needs.
- Separate signed orders, milestones, backlog and recognised revenue.
- Allocate launch, in-orbit, liability and insurance risks in contracts.
Evidence and document checklist
- IN-SPACe authorisation and conditions.
- FDI filings and beneficial-ownership records.
- Spectrum/telecom and data approvals.
- Launch, insurance and customer contracts.
- Export/import control classification and licences.
Common mistakes
- Treating FDI permission as operating authorisation.
- Calling every memorandum an order.
- Comparing satellite capacity with data revenue.
- Ignoring launch failure and in-orbit insurance.
Red flags
- Foreign ownership structure is opaque.
- Revenue depends on one unlaunched asset.
- Spectrum rights are assumed but not granted.
- Contract liability exceeds insurance cover.
Escalation and complaint route
Use IN-SPACe for authorisation questions and the relevant telecom, spectrum, FDI and export-control authorities for connected approvals. High-value launch, liability and data contracts require specialist legal and technical advice.