New Delhi: The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved amendments in the Foreign Direct Investment (FDI) policy on the space sector paving the way for greater FDI inflows and thereby contributing to the growth of investment, income and employment.

Now, the satellite sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector.

"Under the amended FDI policy, 100% FDI is allowed in space sector. The liberalized entry routes under the amended policy are aimed to attract potential investors to invest in Indian companies in space," an official statement said.

As per the amended FDI policy, up to 74% FDI would be allowed under automatic route in satellite manufacturing and operation, satellite data products and ground segment & user segment. Beyond 74%, these activities are under the government route.

Up to 49% FDI under automatic route would be permitted for launch vehicles and associated systems or subsystems, the creation of spaceports for launching and receiving spacecraft. Beyond 49%, these activities are under the government route.

In the manufacturing of components and systems/ sub-systems for satellites, ground segment, and user segment, FDI up to 100% will be permitted under automatic route.

"This increased private sector participation would help to generate employment, enable modern technology absorption, and make the sector self-reliant. It is expected to integrate Indian companies into global value chains. With this, companies will be able to set up their manufacturing facilities within the country duly encouraging 'Make In India (MII)' and 'Atmanirbhar Bharat' initiatives of the Government," an official statement said.

(With UNI inputs)