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Govt considering raising FDI in print media to 49%

NEW DELHI: Finally, good news could be awaiting foreign print media companies who want to invest in India as a significant 49% minority partner.

Given the allowed limit on foreign direct investment (FDI) in TV news media at 49%, there seemed to be no reason for shutting that liberalised door to the print media sector.

The Union Finance Ministry has recommended raising the limit on FDI in print editions of newspapers and periodicals to 49%, according to sources.

Currently, FDI is permitted up to 26% in newspapers and periodicals dealing with news and current affairs through the government approval route.

Sources indicate that increasing the FDI limit in newspapers is an old suggestion of the Department of Economic Affairs and that the Department of Industrial Policy & Promotion ( DIPP) has been asked to consider the government’s proposal to hike FDI in the print media.

The government has already relaxed FDI norms in eight sectors including civil aviation, defence, private security agencies, pharmaceuticals and food processing in order to attract more foreign funds.

Last month, Prime Minister Narendra Modi said that India’s economy was now one of the most open in the world.

Incidentally, the Atal Behari Vajpayee-led NDA government had allowed up to 26% FDI in print media in 2002.

However, the then NDA government had set preconditions for prospective foreign investors when Sushma Swaraj was the I&B minister.

Within print media, foreign equity in news and current affairs was restricted to 26%, while for non-news and non-current print media, foreign ownership was raised up to 74%.

It was stipulated that in news and current affairs, one single Indian shareholder must hold significantly more than 26% of the company’s equity. Besides, if there was to be any significant change in the shareholding pattern, the I&B ministry would have to be informed.

In order to retain the key control of companies in news and current affairs in Indian hands, three-fourths of the employees had to be Indians. Moreover, the Ministry of Home Affairs and the MIB were tasked with examining the credentials of prospective foreign investors.

Significantly, the 2002 NDA government cabinet meeting, chaired by Prime Minister Vajpayee, overruled an earlier parliamentary committee recommendation that the government should not allow FDI in the print media.

The earlier parliamentary committee, which was headed by senior CPI leader Somnath Chatterjee, had overwhelmingly voted against FDI in the print media.

The NDA had defended the Cabinet’s decision, saying that the government had allowed FDI in broadcasting, and it was only logical to allow it in the print media as well, after ensuring that proper safeguards were in place.