SpaceX is facing potential delays in Starlink’s entry into the Indian market, primarily due to regulatory hurdles in obtaining necessary licensing due to complexities stemming from a precedent set in a case involving Verizon Communications.
A report from The Economic Times explains the main issue causing the delay for Starlink’s licensing in India is the requirement for full disclosure of company ownership details, a policy enforced by the Indian government. Starlink, a subsidiary of SpaceX, is hindered by U.S. privacy laws, which limit the disclosure of ownership information.
To address these concerns, Starlink has assured India’s Department of Telecommunications (DoT) that none of its shareholders are from countries sharing a land border with India, a critical assurance in light of past incidents.
This situation closely mirrors the difficulties faced by Verizon Communications India. During its Internet Service Provider (ISP) license renewal, it was revealed that Verizon had minor shareholding from entities in Pakistan, Bangladesh, and Hong Kong, accounting for less than one percent of the company. This discovery prompted the Indian government to advise Verizon to seek license renewal through a government approval route, leading to significant delays.
In response to the Verizon case, the Department for Promotion of Industry & Internal Trade (DPIIT) amended the Foreign Direct Investment (FDI) policy in 2020. This amendment requires foreign companies investing in sensitive sectors like defense and communications to provide complete shareholding details, and to notify the government of any changes in these details.
Currently, the DoT is seeking advice from the DPIIT regarding Starlink’s application, a step that reflects the government’s cautious approach in the wake of the Verizon incident. This careful scrutiny is causing potential delays for Starlink, which had initially hoped to launch operations in India earlier this month.