BENGALURU: India relaxed rules to allow 100% foreign direct investment (FDI) in the space sector in a move aimed at promoting investment, according to a government notification on Wednesday.

India's space ambitions got a boost when it became the first country to land a spacecraft near the unexplored south pole of the moon in August - and the fourth to achieve a soft landing - just days after a similar Russian mission failed.

The FDI policy reform is expected to boost employment and will allow companies to set up manufacturing facilities in the country, the government said in a statement.

"This will give India access to the latest tech advances and much-needed funds, not only from the country but from international investors too," said AK Bhatt, director general of the Indian Space Association.

With a push from Prime Minister Narendra Modi, India has privatised space launches and is targeting a five-fold increase in its share of the global launch market, which some expect to be worth $47.3 billion by 2032. India currently accounts for about 2% of the overall space economy.

India's information technology minister, Ashwini Vaishnaw, last month said the country was eyeing $100 billion in annual foreign direct investment (FDI) in the next few years.

India attracted FDI inflows of $33 billion in the first half of the financial year that started in April 2023. It recorded total FDI of $71 billion in the previous financial year.

(Reporting by Nivedita Bhattacharjee, Angela Christy, Mrinmay Dey and Kanjyik Ghosh; Editing by Emelia Sithole-Matarise and Gerry Doyle)