India Eases Satcom Rules by Dropping Sourcing Clause
The final telecom authorization rules remove a proposed 20% local sourcing requirement for satellite internet operators, though the obligation may still apply through license agreements.
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India has dropped a proposed 20% local sourcing requirement from its final telecom authorization rules, easing one regulatory condition for satellite broadband operators such as Starlink, Eutelsat OneWeb and Amazon Leo.
The Department of Telecommunications this week notified the Telecommunications Authorisation Rules 2026, completing India’s shift from a licensing regime to an authorization-based framework under the Telecommunications Act 2023.
The new framework replaces older licensing rules with service-based authorizations covering unified services, access services, wireline access, internet services and long-distance services.
The local sourcing clause had appeared in draft rules issued last year. It would have required satellite operators to source at least 20% of the value of ground-segment equipment and infrastructure from India within five years of starting commercial services.
That provision has been removed from the final rules.
The obligation may still be enforced indirectly through Global Mobile Personal Communications by Satellite, or GMPCS, license agreements and security undertakings, Mint reported, citing people in the industry aware of the matter.
A government official told Mint the clause was removed because its repetition in the draft rules had created confusion, as the GMPCS license agreement already contains the requirement.
The rules provide regulatory clarity for satellite internet providers, though commercial launches will still depend on spectrum allocation, pricing and related terms.
They also allow satellite internet operators to use gateways in India to serve other countries, subject to approvals. That could help operators serve neighboring markets without setting up local ground infrastructure there.
The rules retain strict security conditions. Satellite operators must demonstrate lawful interception and monitoring systems before starting services. They must also link fixed satellite service terminals to users’ registered premises and maintain location accuracy within 100 meters.
Operators cannot route Indian user traffic through foreign gateways, either directly or through inter-satellite links, even during domestic gateway failures or network optimization.
The final rules also drop a proposed “prohibited investor” clause that would have barred applicants owned, controlled or funded by entities restricted by Sebi or flagged on national security grounds.
The framework gives satellite internet firms a clearer path to launch services in India, but leaves some uncertainty over whether the local sourcing mandate has been dropped in substance or only moved out of the main rulebook.
