Stakeholders give thumbs up to govt move allowing 26% FDI in digital news media
MUMBAI: Media & Entertainment (M&E) industry has welcomed the union government’s decision to allow 26% foreign direct investment (FDI) in digital news media.
“The extant FDI policy provides for 49% FDI under approval route in Up-linking of ‘News & Current Affairs’ TV Channels. It has been decided to permit 26% FDI under government route for uploading/ streaming of News & Current Affairs through Digital Media, on the lines of print media,” the government had said in a release.
Times Internet CEO Gautam Sinha said this is a good start and the government should increase the limit in the years to come.
“At present, a significant part of the growth in the media sector is coming from digital consumption of content with around 25% of the Indian youth being hooked to this medium. It is great that the potential of digital content is being recognized and an industry-specific exception is being made in the guidelines. I believe this move will definitely benefit the online media industry since it will help companies raise additional capital from oversea players/investors,” Sinha stated.
Deloitte partner Jehil Thakkar said the move will enable capital infusion in digital media platforms. “FDI in digital media is a welcome development. Clarity around this fast-growing segment of the media industry will act as an enabler for capital infusion. Significant value will be unlocked going forward.”
Eros International Group Chief Marketing Officer Manav Sethi said that the scope of the impact will be determined by the wording of the provision in the FDI policy. “News and current affairs are present on social media platforms, on digital platforms that are subsidiaries of foreign brands etc. How would you differentiate between TV channels which have 49% and their online streams, which will effectively have 26%?”
KPMG in India Partner and Head, International Tax Himanshu Parekh noted that there was no FDI in digital media unlike TV news channels and print media despite the fact that digital media segment is witnessing exponential growth.
“The M&E industry grew by 13.3% in FY19 (as compared to FY 18) on the back of colossal growth of 43.4% in the digital media segment. This is despite the fact that while the FDI policy currently permits 49% foreign investment in Uplinking of News & Current Affairs TV Channels and 26% in print media sector, both through government approval route, it was silent on FDI in the digital media segment,” Parekh said.
“The Government has today approved the proposal to allow 26% FDI for uploading/ streaming of News & Current Affairs through Digital Media. This is a welcome move and should lead to larger FDI inflows in India in the already burgeoning Digital Media sector.”