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Govt eases FDI norms in broadcasting and 14 other sectors


The ministry of commerce has opened up foreign direct investment (FDI) in 15 sectors which includes broadcasting sector, single brand retail, banking in the private sector.

The proposed reforms also enhance the limit of Foreign Investment Promotion Board (FIPB) from current Rupees Three thousand crores to Five thousand crores, the government said in a release. “The crux of these reforms is to further ease, rationalise and simplify the process of foreign investments into the country and to put more and more FDI proposals on automatic route instead of government route where time and energy of the investors are wasted,” the government said in a statement.

Notes for the broadcasting sector

The government is going to allow 100% FDI in non-news channels through the  auto route. While FDI was increased in news channels to 49% from the existing 26% through the government route. FDI in FM channels was also increased to 49% through the government route.

For DTH industry, cable networks, mobile TV and Head-in-the-sky bsuinesses, the government increased FDI to 100%. However, it permitted FDI up to 49% through the automatic route, following which it will require government approval. The government had earlier in 2012 increased the limit to 74% for the industries.

It’s worth noting that James Murdoch, the current chief executive of 21st Century Fox, had been pushing for liberalization of the news sector. More on that here.

Single brand retail 

– The government also decided that an entity which has been granted permission to undertake single brand retail will be permitted to undertake ecommerce activities. This would mean companies such as Apple, if given permission to do single brand retail, would be able to sell Apple devices online.

– The government added that an Indian manufacturer is permitted to sell its own branded products in any manner i.e. wholesale, retail, including through e-commerce platforms.

–  For the purposes of FDI Policy Indian manufacturer would be the investee company, which is the owner of the Indian brand and which manufactures in India, in terms of value, at least 70% of its products in house, and sources, at most 30% from Indian manufacturers. Further Indian brands should be owned and controlled by resident Indian citizens and/or companies, which are owned and controlled by resident Indian citizens. –

However, in case of ‘state-of-art’ and ‘cutting edge technology’ sourcing norms can be relaxed subject to Government approval.

Download: Press release 

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