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FDI hiked in news channels, cable, DTH and FM radio
MUMBAI: The Narendra Modi-led National Democratic Alliance (NDA) government has increased the ceiling on foreign direct investment (FDI) in the media sector as part of its big-bang reform exercise to attract more investment into the country.
The government has increased FDI limit in the uplinking of news and current affairs TV channels and FM radio to 49 per cent, up from the earlier 26 per cent.
It has also hiked the FDI limit to 100 per cent from 74 per cent in the broadcast distribution platforms like cable TV networks (MSOs and LCOs), DTH, teleport, headend-in-the-sky (HITS), mobile TV and broadcasting content services.
For distribution platforms up to 49 per cent, FDI will be through the automatic route while non-news & current affairs channels are allowed 100 per cent FDI through the automatic route.
However, news channels and FM radio stations have to go through the government route for the entire 49 per cent FDI.
Earlier, up to 49 per cent FDI in the TV distribution sector was through the automatic route, while FDI above that required clearance from the Foreign Investment Promotion Board (FIPB). The FIPB route was also required for securing the entire quantum of FDI for news, non-news and FM radio.
The FDI limit for cable networks (MSOs and LCOs) that were not upgrading their networks to digital addressable system (DAS) was restricted to 49 per cent under the automatic route. However, the new guidelines have brought them on a par with other MSOs and LCOs.
To give a boost to the entire investment environment and to bring in foreign investments, the government has liberalised FDI in 15 major sectors including broadcasting. The proposed reforms also enhance the limit of FIPB approval from current Rs 3,000 crore (Rs 30 billion) to Rs 5,000 crore (Rs 50 billion).
The proposal also contains many other long-pending corrections including those pertaining to limited liability partnerships as well as NRI-owned companies, who seem motivated to invest in India. Few other proposals seek to enhance the sectoral caps so that foreign investors do not have to face fragmented ownership issues and get motivated to deploy their resources and technology with full force.
Along with these sectoral reforms, the Department of Industrial Policy and Promotion (DIPP) has also been advised to consolidate all FDI-related instructions contained in various notifications and press notes and to prepare a booklet so that investors do not have to refer to several documents of different timeframes.
Prime Minister Narendra Modi said today that liberalisation of FDI norms is part of the government’s commitment to ensure ease of doing business in India.
“The reforms are another example of emphasis on minimum government, maximum governance. They will ease, rationalise and simplify processes. India is unstoppable on the path of economic progress. The government wants the world to see the tremendous opportunities India offers. The government’s commitment is that fruits of development will touch every part of India and every citizen of India,” Modi said.
Minister for Finance, Corporate Affairs, and Information & Broadcasting Arun Jaitley said that though the government’s FDI decisions will impact reforms in 15 sectors, investment points will stretch to 32 areas.
Jaitley also said that FDI inflows have increased 40 per cent in the last one year. “Investors prefer investing in destinations where growth is picking up, returns seem likely and where it is easy to do business. In recent months, India’s growth is being driven by public investment and some private investment and increased FDI,” Jaitley said.
He also added that the FDI decisions have been notified with PM Modi’s approval. A post-facto cabinet approval will be taken soon.
DIPP secretary Amitabh Kant said that the government has taken the Telecom Regulatory Authority of India’s (TRAI’s) recommendation on-board while hiking FDI in the media sector.
In 2013, TRAI had recommended that FDI limit should be enhanced to 100 per cent from 74 per cent in broadcast carriage services such as cable TV, DTH, IPTV, mobile TV, HITS and teleport, with up to 49 per cent FDI under the automatic route and beyond 49 per cent with prior approval of the FIPB.
The sector regulator had also recommended enhancement of the FDI limit to 49 per cent from 26 per cent for the uplinking of news and current affairs TV channels and FM radio services while maintaining status quo for the uplinking of non-news and current affairs TV channels and downlinking of TV channels where there is no FDI restriction. It also recommended that FDI should only be allowed with the prior approval of the FIPB.
Earlier, Minister of Commerce & Industry Nirmala Sitharaman had said that the media sector had received FDI worth Rs 454.23 crore (Rs 4.54 billion) in the two-month period beginning April 2015 of this fiscal.