A consensus emerging within the government
is that FDI norms should be same for both the print and electronic
media. More so if it pertains to news.
The industry ministry, under whose jurisdiction the Foreign Investment
Promotion Board (FIPB) falls, has recently issued another set of detailed
guidelines for FDI in various sectors, including broadcasting, reiterating
the fact that FDI through automatic route, as is permissible in some
sectors, is not permitted in the broadcasting sector.
"If the FDI limit in print medium's news category, for so many years
kept out of bounds for foreign investors, is 26 per cent, why should
it be 100 per cent in the electronic medium?" a senior minister in
the Bharatiya Janata Party-led coalition government said when asked
for an opinion on FDI in the electronic medium.
Information and broadcasting minister Sushma Swaraj too told a fellow
parliamentarian in Rajya Sabha on December 10 that if they want, the
government is willing to have a debate on the issue of FDI in the
broadcasting sector.
The issue of FDI in the broadcasting sector is gaining prominence
because of a proposal from Star to take control of Star News channel
completely through a company based in the Virgin Island, that will
be indirectly controlled by News Corp. Swaraj too referred to this
aspect in the Indian Parliament.
Swaraj had also said that she would prefer to take the issue of Star
News channel to the Union Cabinet. However, till today no apparent
move in that direction has been made by her ministry. "Maybe the minister
is waiting for the Parliament session to get over before she takes
the Star case to the cabinet, " a senior government official told
indiantelevision.com today.
Parliament adjourns sine die on 18 December to be reconvened for the
Budget session early next year. With the government having announced
the guidelines for FDI investment in the print medium, a school of
thought in the government that feels that FDI norms for the news category
should be capped at print medium level is slowly gaining ascendency
over the more liberal minded ones.
In the print medium, FDI for the news category is capped at 26 per
cent with one of the riders being that one single Indian shareholder
should hold 51 per cent equity. In the non-news category, FDI up to
74 per cent is permitted.
It is in the light of such developments that the recent industry ministry
note gains significance. The note, while detailing FDI norms, states
that in a TV software production company, 100 per cent FDI is allowed
subject to the condition that a) all future laws on broadcasting and
no privilege of protection by virtue of approval accorded and (b)
not undertaking any broadcasting from Indian soil without government
approval.
FDI, including FII/NRI/OCB/PIO, in hardware facilities such as uplinking
and hubs is welcome in private companies incorporated in India within
permissible limits, that is 49 per cent, inclusive of both FDI and
portfolio investment. The uplinking facilities may also be used for
hiring out the services to various broadcasters, the industry ministry
says.
The note further makes it clear that in cable networks, foreign investment
up to 49 per cent (inclusive of both FDI and portfolio investment)
is allowed of the paid-up share capital of the company.
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