DPIIT stand may pave way for Starlink's India satcom entry

The Department for Promotion of Industry and Internal Trade (DPIIT) has clarified to the telecom department that undertakings given by companies on foreign shareholding should be accepted, a development that will pave the way for Elon Musk-owned Starlink to be granted the licence to start satellite communication services in India.

“The clarity regarding foreign shareholding with reference to Press Note 3, 2020, has come from the DPIIT,” an official aware of the details told ET.

Starlink is seeking a licence for global mobile personal communication by satellite services (GMPCS) to provide satcom services, competing against the likes of Bharti Group-backed Eutelsat OneWeb, Reliance Jio's satellite venture and Amazon for a share of the nascent India market with huge growth potential.


To get the licence, it had given an undertaking to the Department of Telecommunications (DoT) that none of its investors come from countries sharing a land border with India. The company had not provided the complete shareholding details citing privacy laws in the US, following which DoT sought a clarification from the DPIIT.

"The DPIIT has asked DoT to accept the FDI-related documents submitted," the official said.

The DPIIT had in 2020 amended the foreign direct investment policy through Press Note 3 to make prior government approval mandatory for inflows from countries sharing a land border with India. It mandates foreign companies investing in sectors such as defence and communications to submit complete shareholding details to the government. The companies need to notify the government also in the case of any change in shareholding.

In a somewhat similar case, Bharti Airtel had provided the shareholding details of major shareholder Singtel from Singapore to DoT for renewing its telecom licence in six circles.

Singtel is a listed entity in Singapore and the company had provided details of around 92% share capital of the company. The remaining 8% were public shareholders whose details were not available, Airtel told DoT while giving an undertaking that it complies with the FDI policy of the government.

With all hurdles crossed now, Starlink is likely to be soon issued a satcom licence. Eutelsat OneWeb and Reliance Jio’s satcom venture already have the GMPCS permit to offer satellite broadband services. Jeff Bezos-led Amazon has applied for a licence for its Project Kuiper satellite broadband venture.

Both Eutelsat OneWeb and the Jio-SES combine are striving for a first mover advantage in the market.

Space sector regulator IN-SPACe recently estimated India’s space economy to have a potential to hit $44 billion by 2033 and account for about 8% of the global share by then, up from around 2% now.

The clarification from the DPIIT has also helped Bharti Airtel renew its licence in six circles. ET had reported last week that Airtel had paid over Rs 35 crore to DoT to continue using spectrum in these circles for three months. Five licences are expiring on February 9 while one will expire in July.

Grant of the licence to Starlink was delayed after DoT sought a clarification from the DPIIT about accepting FDI-related undertakings which don’t give full ownership details.

The clarification was necessary in the backdrop of a case related to Verizon Communications. The US company had given an undertaking, like Starlink, for renewing its internet service provider licence. In the undertaking, Verizon had declared that none of its entities had shareholders from India’s neighbouring countries sharing a land border.

But the government later found out that the US company had some shareholding from Pakistan, Bangladesh and Hong Kong (a special administrative region of China) in its entities, and told Verizon to apply through the government approval route for renewing its licence.