Govt. issues guidelines for FII in newspapers & printing of facsimile editions

NEW DELHI: The Indian government today came out formally with a set of detailed guidelines for foreign investments in newspapers and printing of facsimile editions here, including issuance of fresh equity in case of FDI.

At least 50 per cent of the foreign direct investment (FDI) will have to be inducted by issue of fresh equity, while the balance may be inducted through transfer of existing equity, the information and broadcasting ministry stated today.

The government decided to allow, with immediate effect FDI (that includes foreign direct investments by non-resident Indians and people of Indian origin) and portfolio investments by recognized FIIs up to a ceiling of 26 per cent of the paid up equity capital in Indian entities publishing newspapers and periodicals dealing with news and current affairs.

The ministry said that such investment would be permissible by foreign entities having sound credentials and international standing, subject to certain conditions.

Printing of facsimile editions, in whole or in part(s), of foreign newspapers, by Indian entities, with or without foreign investment, and also by foreign companies owning the original newspapers has been allowed, provided they get incorporated and registered in India under the Companies Act, 1956.

The media companies which have interests in both print and broadcasting include Essel Group (Zee Telefilms), ABP Group, Bennett, Coleman & Co. Ltd, Jagran Group and Sun Group.

Eligibility Criteria For Foreign Investment

    Foreign Investment will be allowed only where the resultant entity (hereinafter called “New Entity”) is a company registered with the Registrar of Companies under the provisions of the Companies Act, 1956.

    Permission will be granted only in cases where equity held by the largest Indian shareholder is at least 51 per cent of the paid-up equity, excluding the equity held by public sector banks and public financial institutions, in the New Equity.

    At least 50 per cent of the foreign direct investment will have to be inducted by issue of fresh equity. The balance may be inducted through transfer of existing equity.

Eligibility Criteria For Facsimile Editions

    Any foreign company owning the original foreign newspaper will be permitted to publish the facsimile edition of its newspaper provided it is incorporated and registered as a company with the Registrar of Companies in India.

    It has a commercial presence in India with its principal place of business in India.

    At least 3/4th of the directors on the board of the New Entity and all key executives and editorial staff are resident Indians.

    The facsimile edition shall not carry any advertisements aimed at India readers in any form.

    The facsimile edition shall not carry any locally generated content/India specific content, which is not simultaneously published in the original edition of foreign newspaper.

    Prior permission from I&B ministry is obtained for publication of facsimile editions and the title has to be registered with the Registrar of Newspapers for India.

    The applicant entity shall make full disclosure, at the time of application, of shareholders’ agreements and loan agreements that are finalised or proposed to be entered into. Any subsequent change in these would be disclosed to the I&B ministry within 15 days of such a change.

Eligibility Criteria For Syndication By Newspapers

All registered newspapers (Indian publications) are authorized to make syndication arrangements for procuring material, including photographs, cartoons, crossword puzzles, articles and features from foreign publications (content provider) under automatic approval route subject to the following conditions:

    The total material so procured and actually printed in an issue of the Indian publication does not exceed 20 per cent of the total printed areas of that issue.

    The syndicated material does not include full copy of the editorial page or the front page of a foreign publication.

    The mast head of the content provider publication is not utilised in the Indian publication.

    Credit to the content provider is necessarily given prominently as a byline in the Indian publication.

    The material procured under syndication arrangement is such that has already been published in the content provider publication.

    Any case involving relaxation of any of the above conditions would require examination by the I&B ministry.

    Before any material is actually procured under syndication arrangement beyond the above noted conditions, the Indian publication should have applied for and obtained prior approval of the ministry.

    These guidelines would not apply to the cases where I&B ministry has issued its approval/no-objection certificate for publication of facsimile edition of a foreign newspaper.

Other details are available on http://mib.nic.in. The new guidelines supersede the previous ones issued by the I&B ministry on 21 November 2002.

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