The government has notified the Telecommunications (Authorisation for Provision of Principal Telecommunication Services) Rules, 2026 on Wednesday, completing the transition from a licensing regime to an authorization-based framework under the Telecommunications Act, 2023. According to Mint, the delay in notifying the rules had stalled operator applications for the past seven months for various services. The final rules remove the proposed 20% local sourcing requirement for satellite broadband operators that had been included in draft rules issued last year, requiring operators to source at least 20% of ground-segment equipment value from India within five years of launching commercial services. However, industry sources said the local sourcing mandate may still be indirectly reflected through GMPCS security guidelines and operator undertakings, with a government official noting that "The same has been removed from the final rules as this was creating confusion."
The most immediate obstacle facing India's satellite internet sector is the pending security clearance from the Ministry of Home Affairs. According to Business Standard, companies like Starlink, Eutelsat OneWeb, and Orbit Connect India (Jio-SES joint venture) hold all required licenses but cannot switch on their services. The fundamental problem lies in Starlink's satellite constellation operating without regard for political boundaries, making it difficult to obtain separate security clearance for each satellite gateway and comply with Indian law requirements for localizing facilities for lawful interception. This concern was amplified after reports emerged that nearly 50,000 Starlink terminals were operating without authorization in Iran during the 2025-26 protests, when Iranian authorities shut down domestic internet access. The episode has alarmed Indian security agencies, who question how confident they can be that a foreign-controlled satellite network will comply with shutdown orders in a crisis.
The new rules introduce stricter security requirements for satellite operators, with companies now required to demonstrate lawful interception and monitoring systems before beginning services. According to Mint, operators must link fixed satellite service user terminals to users' registered premises with location accuracy maintained within 100 metres. The rules also prohibit operators from routing Indian user traffic through foreign gateways, either directly or through inter-satellite links, even during domestic gateway failures or network optimization. Additionally, satellite operators must ensure user terminals cannot conceal their actual location through hardware or software spoofing tools, with operators required to deploy systems to detect and report such devices. The rules also drop a "prohibited investor" clause that had sought to bar applicants owned, controlled or funded by entities restricted by Sebi or flagged on national security grounds.
The satellite communication industry has raised significant concerns with the government over the exclusion of commercial satellite internet services from draft non-auction spectrum assignment rules. According to Mint, T.V. Ramachandran, president of Broadband India Forum (BIF) wrote in a letter to telecom secretary Amit Agrawal on Tuesday, stating that "The absence of an express reference to GMPCS in the draft rules is extremely concerning to the sectoral players and investors and appears to merit urgent reconsideration and requisite clarification so as to ensure complete alignment with the provisions allowed under Entry No. 16 in the First Schedule of the Telecommunications Act, 2023." BIF represents major companies such as OneWeb, Hughes, Nelco, and Amazon, among others. The industry body has urged the government to explicitly include GMPCS in the First Schedule of the draft rules, in line with the Act, and seek amendments to ensure a clear framework for GMPCS services under the administrative allocation route.
Despite regulatory delays, Starlink has made significant preparations for its Indian market entry. According to Business Standard, the company announced its intention to enter India in November 2022, received a letter of intent from DoT in May 2025, obtained a global mobile personal communication by satellite services license in June 2025, and received IN-SPACe clearance in July 2025. The company has plans to build earth station gateways at nearly a dozen locations across India, including a central hub in Mumbai, and has established partnerships with various state governments and central agencies including the Unique Identification Authority of India for Aadhaar-based customer verification. However, Starlink's foreign direct investment proposal remains pending with the Department of Space, with officials flagging concerns about the company structure requiring government clearance for foreign ownership above 74 per cent. Industry insiders attribute delays to external geopolitical factors, primarily the falling out between Elon Musk and US President Donald Trump.
