Govt may allow FII inflows in news channels

NEW DELHI: The Indian government is contemplating allowing foreign institutional investors (FIIs) to invest in television news channels even as the 31 October deadline to conform to the existing guidelines draws near.

FIIs could not invest in news channels uplinking from India, according to an interpretation of an existing government order (it cannot be technically termed as a law) that was announced in March, 2003.

The government order, which was issued in the aftermath of Star News case, impacted most Indian news channels as there were severe restrictions on their capacity to access FII funds. As per the order, the same guidelines followed in print medium regarding foreign investments had be followed in toto by news channels as well. There is a cap of 26 per cent on total foreign holdings in news publications in the country.

A senior information and broadcasting ministry official told, "We are seriously seized of the matter and would like to clear the confusion before the October deadline."

The official further added that the "possibility of inclusion of FII investments within the overall sectoral cap in news channels is high."

At present, news channels desirous of uplinking from India are not eligible to have more than 26 per cent foreign direct investment (FDI).

The FII issue had kicked up a storm as most news ventures like the NDTV channels, Aaj Tak, Headlines Today, CNBC-TV 18 and Zee News were asked to conform to the government order. These channels had petitioned the I&B ministry that apart from other issues, it would be difficult for listed Indian entities to keep track of any FII buying or selling of shares from the stock market.

According to the government official, had all the news channels been unanimous on the FII and other foreign investment issue, it would have been easier for the government to take a final call.

"But there have been different sets of explanations and demands. One broadcaster even wanted the total foreign investment cap in news ventures being raised to 49 per cent," the official said. "However, raising of foreign investment caps in the present scenario is highly unlikely.

Adherence to the foreign investment cap in case of news ventures is also one of the issues why the government has not yet cleared Zee's request seeking uplinking permission for a proposed business news channel which had a short-lived run on a DTH platform before being discontinued.

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