The TRAI has recommended that the FDI limited for News & Current Affairs TV Channels be increased to 49%, something which should make Rupert Murdoch a little happy, even if it has taken 5 years, and even if this recommendation doesn’t cover print media (which is what he wanted). At present, the FDI limit for News channels is 26%, while that for non-News channels is 100%, although both require approval of the Foreign Investment Promotion Board (FIPB). Note that these are recommendations, and the Ministry of Information and broadcasting is under no obligation to accept them.
On News & Current Affairs Channels
Stakeholders had argued for increasing this limit, saying that the present cap of 26% for uplinking of News and current affairs channels “acts as a disincentive to prospective investors from infusing funds as they do not find it economically and financially beneficial” and this is why “hardly any news broadcasting company has been able to fully utilize its existing FDI limit.” Even more interesting: “shortage of funds, as per them (stakeholders), is adversely affecting their abilities to, gather and honestly report quality news material, grow and develop quality journalistic best practices, attract quality talent etc. and all these factors are leading to evils like paid news and private treaties etc.” Not unexpectedly, the request was for allowing 49% FDI in all media, “FDI limit should be enhanced to 49% across the board i.e. it should be applicable for TV, print, Internet etc.”, oddly enough, forgetting that Internet, as media, is not recognized or regulated by the Indian government.
There was opposition to this move, though: some news organizations argued that news media is best left in Indian hands, and “giving controlling stake in content, especially in news segment, to foreigners may lead to the danger of gradual manipulation of the public views and ultimately can destroy the delicate fabric of composite culture and value system as well as the secular credentials of the country.”
The TRAI feels that safeguards exist, and “existing provisions in the uplinking guidelines for the news and current affairs channels to safeguard management and editorial control in news creation. These include:
i) requirement to employ resident Indians in key positions (CEO of the applicant company, 3/4th of the Directors on the Board of Directors, all key executives and editorial staff),
ii) the largest Indian shareholder should hold at least 51% of the total equity,
iii) reporting requirements when any person who is not a resident Indian is employed/ engaged etc. If the FDI limit in uplinking of TV channels of the news and current affairs category is enhanced to 49%, then as per provision at ii) above the remaining Indian shareholding (51%) would have to be with a single Indian shareholder. Several stakeholders have advocated for continuance of these conditions. ”
These provisions, in view of the Authority, are adequate to safeguard against any adverse impact arising from FDI infusion in the news broadcasting sector, and that while granting permissions for uplinking of channels from within the country as well as for downlinking of all channels uplinked from within the country or abroad, MIB takes security clearance from the Ministry of Home Affairs.” It has recommended 49% FDI in News & Current Affairs Channels, with FIPB approval.
FDI In FM Increased to 49%
FDI in FM Radio has also been increased to 49%. Stakeholders from the FM industry voiced similar concerns to news channels: that the 26% FDI limit did not attract enough investment. While there was no opposition to this move, they also did suggest that the controlling stake of 51% should be with a single owner. FM Radio, it appears, will need Rs 3500-4500 crore in the next few years for payment of One Time Entry fee (OTEF) and creation of infrastructure for Phase III FM radio expansion, for working capital including credit given to advertisers and their agencies etc. Phase III is expected to see India adding 839 new private FM radio stations, and coverage expanding from 87 cities to 313 cities.
– TRAI FDI Recommendations