The Department of Promotion of Industry and Internal Trade (DPIIT) has sought views from the Ministry of Information and Broadcasting on issues raised by some stakeholders over the government’s decision to restrict 26% FDI in digital media, reported Business Standard last week. The Union Cabinet had approved restricting 26% FDI under government route for uploading/streaming of news and current affairs through digital media in August.

What is the industry concerned about? Some of the industry players and experts have said that the move to cap FDI in the sector to 26% would restrict them from raising funds. Other industry players are seeking clarity on how to treat cases of television broadcasters who stream news online, but are allowed 49% FDI and for the news websites which belong to foreign entities.

Internet and Mobile Association of India too had sought clarifications on the issue and said that the decision would have an impact on the start-up ecosystem as continued FDI is critical to enable Indian digital media start-ups to reach global scales. It had stated that failure to clarify what is actually sought to be regulated would be a death blow to many of these. It is worth noting that until August, digital media was not considered as a separate category for the purpose of FDI. To broadcast news in India, a broadcast media company needs an up-linking and/or downlinking license, while newspapers or magazines need to register with the Registrar for the Newspapers of India (RNI), both of which fall under the Union Ministry for Information and Broadcasting.