Starlink’s India rollout faces FDI, security clearance roadblock: Report

Satellite internet provider Starlink’s plans to roll out satellite communication services in India have hit a regulatory roadblock, with the government adopting a cautious approach to clearing its foreign direct investment (FDI) proposal amid rising national security concerns.People familiar with the matter said the FDI application of the Elon Musk-owned company is currently on hold and could even face rejection if pending queries are not satisfactorily addressed.“There are questions around cross holding in parent SpaceX and some other technical parameters,” said a person requesting anonymity, as quoted by ET. “There is some confusion around cross holding norms and clarity is needed on this,” they added.The company is also awaiting a key security clearance, which officials said will be granted only if authorities are confident about maintaining control over the network in scenarios involving potential misuse.“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.”Officials noted that national security remains a priority in the satellite communications sector, particularly because such networks operate beyond conventional territorial boundaries.Recent geopolitical developments, including the ongoing West Asia conflict, have heightened scrutiny. The reported use of Starlink terminals inside Iran despite restrictions has raised concerns within Indian security agencies.While a similar scenario is not expected domestically, the Centre is taking a precautionary stance to prevent any potential misuse of satellite-based internet services.Starlink has already obtained a global mobile personal communication by satellite services (GMPCS) licence and authorisation from the Indian National Space Promotion and Authorisation Centre. However, it cannot commence operations until spectrum is allocated and approvals related to FDI and security compliance are granted.The company is expected to engage with officials from the commerce ministry later this month or early May to discuss its proposal.Under current policy, India allows up to 100 per cent FDI in satellite services, but automatic approval is limited to 74 per cent, with higher stakes requiring government clearance. Companies must also comply with norms on cross holdings and operate through an Indian subsidiary to secure approval.