Companies

Centre specifies entities to be covered under 26% FDI in digital news media

New Delhi | Updated on October 16, 2020 Published on October 16, 2020

The Centre has come up with a clarification on its decision to permit up to 26 per cent Foreign Direct Investment (FDI) in digital news media through the government route by specifying the entities on which the policy would apply, and has also given one year’s time to such entities to align their foreign investments accordingly.

The categories of Indian entities, registered or located in India, on which the FDI cap will apply, include digital media entity streaming and uploading news and current affairs on websites, apps or other platforms, according to a clarification note issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on Friday.

Other entities on which the FDI rules will apply include news agencies that gather, write and distribute/transmit news directly or indirectly to digital media entities and/or news aggregators, and also news aggregators that use software / web applications, aggregate content from various sources such as news websites, blogs, podcasts, video blogs, user submitted links in one location.

“The Department had received representations from stakeholders seeking clarification on certain aspects of the aforesaid decision,” the note pointed out, adding that the clarifications were made after due consultations.

Entities covered under the above would be required to align their FDI to the 26 per cent level with the approval of the Central Government, within one year from the date of issue of this clarification, the note added.

The Information & Broadcasting Ministry, too, on Friday, came up with an announcement for the digital media. It said that digital media companies can form self-regulatory bodies “for furthering their interest and interaction with the government” similar to the self-regulatory bodies formed by the print and electronic media industry.

In addition, the Ministry said it will also, in the near future, consider extending PIB accreditation to reporters, camerapersons and videographers of digital media entities that are involved in uploading or streaming of current affairs and news.

This will be done to enable them to have better access to official press conferences and interactions. In addition, this will also make them eligible to get digital advertisements through the Bureau of Outreach and Communication.

The Centre had announced its FDI policy for entities engaged in the digital news media sector on September 18, 2019, allowing FDI up to 26 per cent through the government approval route. As different entities covered by the policy were not specified, the doubts put forward by the industry included how news aggregators would be treated by the government.

The note added that compliance with the FDI policy and the applicable FEMA notification would be the responsibility of the investee entity. The entity would need to adhere to conditions, which include the requirement that the majority of Directors on the Board of the company shall be Indian citizens and the Chief Executive Officer shall be an Indian citizen. The entity shall also be required to obtain security clearance of all foreign personnel likely to be deployed for more than 60 days in a year.

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Published on October 16, 2020
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