Digital Media to comply with 26% FDI cap: Govt

The Centre on Friday informed that news agencies providing information to digital media firms and companies uploading news and current affairs on websites will now have to comply with a 26% foreign investment cap.

“These companies would be required to align their FDI to the 26 percent level with the approval of the central government, within one year from the date of issue of this clarification”, the Department for Promotion of Industry and Internal Trade (DPIIT) said.

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The categories are – entities uploading/streaming news and current affairs on websites, apps, other platforms; news agencies which gather, writes, and distributes/transmits news, directly or indirectly, to digital media entities and/or news aggregators; news aggregators which, using software/web applications, aggregates news content from various sources, such as news websites, blogs, podcasts, video blogs, in one location. Digital media, news aggregators, agencies need to comply with 26pc FDI cap, informed the Govt.

Reportedly, Union Cabinet a year back, approved 26 percent FDI (foreign direct investment) under government route for uploading/streaming of news and current affairs through digital media, on the lines of print media.

A section of industry players and experts had stated that the move to cap FDI in the digital media sector to 26 percent throws up questions that need clarifications

The department said that it had received representations from stakeholders seeking clarifications on certain aspects of this decision.

“After due consultations, it is clarified (that) the decision of permitting 26 percent FDI through government route would apply” to certain “categories of Indian entities, registered or located in India,” it said.

The company would also have to adhere to certain conditions such as the majority directors on the board of the firm shall be Indian citizens; the chief executive officer shall be an Indian, the report added.

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