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Flooded with concerns from media companies on the recent imposition of a 26 per cent limit on foreign direct investment (FDI) through the government route in the digital media sector, the Centre is looking at coming up with a clear decision on how such companies that already have a foreign share holding above 26 per cent should be treated.
“The DPIIT has received numerous queries on the implications of the FDI limit of 26 per cent in digital media. It is closely examining its options regarding the fate of the companies that already have FDI greater than 26 per cent. Most other concerns need only some clarifications and explanations,” an official told BusinessLine .
The Information and Broadcasting Ministry has sent its comments on the matter to the DPIIT which is now being examined by it. “A decision could be taken based on a common understanding of the matter and in consultation with other key Ministries such as Finance,” the official said.
In August this year, the DPIIT came up with a Press Note permitting 26 per cent FDI under government route for uploading/streaming of news and current affairs through digital media. This came as a jolt for media companies as prior to that FDI caps existed only for the Indian print media at 26 per cent and news broadcast television companies at 49 per cent and there was no such cap on digital media.
“As per the available options, digital media companies with more than 26 per cent FDI could be asked to divest their stake till they reach the permitted limit. Alternatively, a certain amount of grand-fathering could be allowed to permit companies that have been set up before a threshold period to continue to do business without being subject to FDI caps,” an industry source said, adding that other proposals could also be looked at.
The other area of concern for media companies is the fact that since the FDI approval will be through the government route, all proposals will be vetted by the Centre and, therefore, some subjectivity could be involved which could go against those viewed to be taking a position against some policies of the government.
There is also lack of clarity on issues such as the impact of the FDI cap on foreign news websites whose content can be accessed through online streams in India, on TV channels that have a significant digital presence but have FDI greater than 26 per cent (up to 49 per cent which is allowed for TV) and on online intermediaries like Facebook and Google that upload and stream news and current affairs. “Most of these issues can be clarified by issuing notes wherever necessary,” the government official said.
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