What's holding back US satellite service provider Starlink's Indian foray?

Starlink's India entry faces delays over security clearance, FDI approval, and spectrum rules, even as the satellite broadband market gathers momentum

Elon Musk-backed satellite broadband service provider Starlink has been aiming for an India launch since it first announced its entry back in November 2022. Three and a half years on, the SpaceX subsidiary continues to face hurdles. And, according to industry insiders, the wait might just get longer: The company is yet to receive clearance from security agencies and the last set of regulatory approvals in the form of clearance of its foreign direct investment (FDI) proposal.  

“They have received a go-ahead from IN-SPACe and DoT (Department of Telecommunications), but security clearance is still in limbo,” said a senior government official, asking not to be named. 

Indian National Space Promotion and Authorisation Centre (IN-SPACe) cleared Starlink to operate in India in July 2025, a month after the DoT issued it a global mobile personal communication by satellite (GMPCS) services licence. DoT gave its letter of intent in May 2025. The firm received provisional spectrum for trials in September 2025 and has been undergoing trials for security clearance since.   

However, government officials speaking to Business Standard over the past several months have flagged concerns from a national security point of view, noting that control of the satellite network must remain within the country. 

“Securing separate security clearance for each satellite gateway and localisation of facilities for lawful interception are required. But there has to be complete compliance of security norms, which is tricky in their case since the (constellation) network operates without the need to conform to political boundaries,” the official added, alluding to instances of Starlink offering services in international conflict areas.  

The most recent example is Iran where Starlink terminals have been smuggled in to enable political activists access the internet amid an internet shutdown by the Islamic regime since January. Starlink also offered its service free of charge in Ukraine when the Russia-Ukraine war began in 2022. As per licence terms in India, Starlink has to provide call data records to security agencies upon request and turn off services at times of crisis under government direction.  

“Their FDI (foreign direct investment) proposal is yet to be approved. There are concerns regarding the structure of the company,” said another senior official, seeking anonymity as the discussions are not public.  

India allows approvals for proposals with 100 per cent FDI in satellite services, with automatic approvals for proposals with up 74 per cent foreign investment. Higher levels of investment require government clearance. While mandatory ownership disclosure norms issued by the Department for Promotion of Industry and Internal Trade (DPIIT) have to be complied with, the company’s FDI application is pending with the Department of Space (DoS). Permission for the use of satellites to link to India and setting up a company for that in India has to be given by DoS, an official said. Queries sent to DoT and DoS did not elicit a response as of Monday evening.    

Spectrum allocation, pricing pains  

Compliance with regulatory norms would only be among the first steps for the company to make an India foray. First, the spectrum required for beaming satellite services in India will have to be allocated. The Telecom Regulatory Authority of India (Trai) has identified the spectrum bands and proposed a five-year spectrum allotment, extendable by two years, as per its May 2025 recommendations. Starlink has suggested a longer 20-year term, while Indian satellite service providers Reliance Jio and Bharti Airtel have backed three to five-year terms to gauge market stability.  

However, officials aware of the details said that the rules on the allocation of satellite spectrum, on an “administrative basis”, as per the Telecommunications Act 2023, were yet to come into force. “The rules are a complex lot and are yet to be issued. Not all sections of the Act have been notified, including spectrum assignment and licensing of the services,” a senior government official added. Sections 3 and 4 of the Act, dealing with the new authorisation framework for telecom networks and spectrum assignment on an auction and administrative basis, respectively, are key among a bunch of rules that are yet to be notified. 

However, according to legal experts, the government can proceed with the allocation under existing regulations and over to the new regulatory regime once rules are notified.  

Yet another hurdle can be the price at which satellite spectrum is assigned administratively. Trai had suggested keeping the charge for using satellite spectrum at 4 per cent of adjusted gross revenue with possible subsidy for user-terminals; DoT backs levying a 5 per cent charge with an incentive of 1 per cent for providing connectivity to far-flung or remote areas.  

“The DoT is pretty much decided on the pricing, and it is sticking to the 5 per cent levels, with discount for remote connectivity but no subsidy on terminals,” said a source familiar with the developments. The Digital Communications Commission (DCC), the top decision-making body within the communications ministry, will take a final call on this.  

Clarity on both elements — spectrum and pricing — is crucial for satellite communications providers to launch commercial services. This applies to Starlink as well as Bharti group-backed Eutelsat OneWeb and Reliance Industries-backed Jio-SES joint venture Orbit Connect India. The latter two have secured the required licences and permits but await security clearances at the same pace as Starlink.   

Telecom minister Jyotiraditya Scindia told reporters in February that the government was working to ensure that the rollout of satellite services did not suffer from want of regulatory clarity on spectrum assignment and pricing.  

Big business 

Satellite broadband holds strategic value for India as the service may be the best way to connect the unconnected and remote parts of the country, where terrestrial networks cannot venture, thereby addressing the digital divide for millions of underserved users.  

The revenue pie for satellite services is estimated to be ₹15,000-18,000 crore, far smaller than the ₹3.7 trillion revenue that terrestrial mobile network services churned out in FY25.  

But going forward, the satellite communication (SATCOM) segment is projected to reach $14.8 billion in India by 2033, according to a 2025 EY-FICCI report on Unlocking India’s Space Economy.  

By leveraging satellite constellations, India can accelerate broadband penetration, enhance financial inclusion, and strengthen digital infrastructure, supporting flagship initiatives such as Digital India and BharatNet, the report said.   

Deloitte predicts that certain satellite operators will pursue direct competition strategies, particularly in developing regions. “These operators will offer services at substantially lower price points than terrestrial providers, aiming to capture underserved market segments through aggressive pricing and simplified service offerings,” it said in a March 2026 report, outlining the competition from Direct-to-Device services where high-speed connectivity will come from satellite directly to mobile phones, without the need of an internet connection. The entry of Starlink could well catalyse this.  

Is Starlink prepared?  

The world’s largest satellite communications provider with over 10,000 lower earth orbit (LEO) constellations, is learnt to have plans to build earth station gateways at nearly a dozen locations in India including Mumbai. It has also applied for permission to import equipment for creating this infrastructure.  

Starlink is also tying up with various state governments and central government entities, the latest being the Unique Identification Authority of India to enable Aadhaar-based customer verification. The company is yet to announce the pricing structures for its commercial plans for consumers or enterprises in India, but generally the service requires a terminal or a dish, which costs $250-380 globally, depending on the country. The commercial plan may be a monthly or annual cost on top of this one-time spend for dedicated internet speeds of up to 100 Gbps.  

Existing service providers that offer data and broadband plans, like Reliance Jio and Bharti Airtel, offer much lower hardware costs, speeds of up to 1 Gbps, and often bundle over-the-top (OTT) app subscriptions, at total monthly plans ranging between ₹1,000 and 4,000. Starlink is learnt to have leased a large office space in New Delhi and to be actively hiring for on-site finance, operations, and compliance jobs in Bengaluru, according to social media posts.   

Starlink’s willingness to comply with the government’s requests to halt services in any area, after it has been given clearances to operate, also remains uncertain, said Bengaluru-based public policy research firm Takshashila Institution in a note dated April 12. The note also flags the risk of the company leveraging sensitive data from its users. 

According to industry insiders, Starlink’s application also continues to lag due to external geo-political factors, primarily the falling out between Elon Musk with US President Donald Trump. “There is no reason now that India should give any leeway to Starlink; rather it would have to comply with terms and conditions set by the Indian government,” said a senior industry executive asking not to be named.  

Queries sent to Starlink did not elicit a response as of Monday evening.