Starlink unable to get signal for India liftoff; faces FDI hurdles amid security concerns

New Delhi: Starlink's aim to offer satellite communications services in India is facing a steep hurdle as the government has turned cautious in clearing the Elon Musk-owned company's investment proposal amid heightened national security concerns fueled by shifting global geopolitics.

People aware of the details told ET that the foreign direct investment (FDI) application of Starlink is currently on hold and can even be rejected if the government's queries aren't satisfactorily addressed.

"There are questions around cross holding in parent SpaceX and some other technical parameters," said a person requesting anonymity.


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The company is also awaiting the crucial security clearance, which can only be granted if the government and security agencies are confident that they can control the situation, such as during a potential misuse of Starlink's internet services by rogue actors, said the people cited above.

"There is an alarm in the government about the threat that Starlink can pose in national security situations, like war or other critical development," said a second person tracking the security compliance of Starlink. "They want to be sure to tackle any situation and want to test the network thoroughly to mitigate any potential threats."

National security has remained a top priority for the Indian government, especially in satellite communications as such networks operate outside the physical boundaries of a country.

However, geopolitical crises, like the West Asia conflict, wherein Starlink terminals were found to have been used inside Iran despite a government ban have raised alarm within security circles in India.

Spectrum Yet to be Allocated

While such a scenario isn’t anticipated in India, the Centre wants to be extra cautious to thwart any potential misuse.

SpaceX didn’t respond to email queries.

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Starlink has already secured a global mobile personal communication by satellite services (GMPCS) licence and authorisation from the Indian National Space Promotion and Authorization Centre (IN-SPACe) to offer satcom services in the country. The company, however, can’t launch its services as the government is yet to allocate spectrum and also hasn’t given its clearance for FDI and security compliance.

Senior executives at Starlink are expected to meet commerce ministry officials later this month or early May to discuss the company’s FDI proposal, said the people cited above. While India permits 100% FDI for satellite operators like Starlink, automatic approval is given only till 74% stake, beyond which government nod is mandatory.

Companies need to abide by rules on cross holdings. Also, any global entity needs to have an Indian subsidiary to get FDI nod, as per the space policy.

“There is some confusion around cross holding norms and clarity is needed on this,” said the first person.