Starlink's India entry delayed as FDI clearance faces security concerns

Starlink's FDI proposal on hold as govt flags security risks; approval may depend on clarity from Starlink and its ability to address concerns over potential misuse of satellite services

Starlink’s plan to offer satellite communication services in India has hit a roadblock, with the government adopting a cautious stance on clearing its investment proposal amid rising national security concerns, according to a report by The Economic Times.

 

The report said the foreign direct investment (FDI) application is currently on hold and could be rejected if the company fails to adequately address queries raised by authorities.

 

It added that concerns have been flagged around cross-holding structures involving parent SpaceX, along with certain technical parameters.

 

Starlink is also awaiting a key security clearance, which depends on whether authorities are satisfied that potential misuse of its services by rogue actors can be effectively controlled.

   

Citing people familiar with the matter, the report said there is growing concern within the government about the risks Starlink could pose in national security situations, such as during conflict or other critical developments. Authorities are therefore keen to subject the network to thorough testing to mitigate potential threats.

 

National security has remained a key priority for the government, particularly in the satellite communications space, given that such networks operate beyond physical borders.

 

The recent geopolitical developments, including the reported use of Starlink terminals in Iran despite restrictions, have heightened concerns among Indian security agencies.

 

While such a scenario is not expected in India, the government is taking a precautionary approach to prevent any potential misuse, the report said.

 

Starlink has already secured a global mobile personal communication by satellite services (GMPCS) licence, along with authorisation from the Indian National Space Promotion and Authorisation Centre. However, it cannot launch services until spectrum is allocated and both FDI and security clearances are granted.

 

Senior executives from the company are expected to meet commerce ministry officials later this month or early May to discuss the proposal, according to the report.

 

India permits 100 per cent FDI in satellite services, but automatic approval is available only up to 74 per cent, with higher stakes requiring government clearance.

 

Companies must comply with cross-holding norms and set up an Indian subsidiary to secure approval under the current space policy, with some lack of clarity around these norms still needing to be addressed.