ANALYSING THE PARADOX OF AUTHORISATION RESTRICTIONS UNDER NGP AND FDI LIBERALISATION IN INDIA’S SPACE SECTOR

NGP provides a much-needed outline for the operation of Non-Government Entities (NGEs) in the space sector. One key objective highlighted through NGP is the focus on keeping the ‘management and control’ in the hands of Indian players. One such example could be the requirement of ‘fresh authorisation’ on account of post-facto notification whenever there is a transfer of control to a non-Indian entity, including any significant change in shareholding patterns or equivalent changes in partnership or trust. It prioritises national interest while ensuring transparency and accountability as well. Viewing NGP cumulatively with the liberalised FDI policies indeed reflects India’s intention to strengthen its global reach in the space sector. However, balancing FDI liberalisation with a restricted authorisation policy might challenge the successful execution of ISP 2023. On the one hand, India is opening doors to foreign investors, which is likely to impact the decision-making of the NGEs. On the other hand, limiting the authorisation to Indian entities to ensure that the management and control lie in the hands of domestic players does not seem to align with the liberalised FDI incentive. Furthermore, the fresh authorisation requirement owing to post-facto notification in case of alteration in control seems somewhat perfunctory. On a regulatory basis, this seems a positive approach towards balancing innovation through investment. However, in absence of a concrete regulatory framework with legal backing will pose a challenge in the application of these guidelines as it will be difficult to engender the confidence of foreign investors.