Amit Khare, the Secretary of the Ministry of Information & Broadcasting, on Tuesday said that foreign direct investment rules applicable to print media should also apply to news aggregators. Aggregators, like Inshorts and Dailyhunt, are apps or websites that curate their content from other publishers, and some use algorithms to personalise content for readers. “I would not like to announce it here, that is not my role. But there is a very serious thinking that a level playing field should be there between digital platforms and print media. But of course the announcement will come after the decision is finally taken by the government,” Khare said during a panel discussion held online at e-FICCI Frames 2020.
“26% [FDI cap] should be applicable to the aggregators as well as print media,” he added.
If aggregators’ investments are capped too, that may spell trouble for players like Dailyhunt and Inshorts, which have raised millions of dollars from foreign investors. Dailyhunt raised US$25 million in 2016 from ByteDance, which owns TikTok.
Khare was responding to Girish Agarwal, Non-Executive Director at the Dainik Bhaskar Group, who complained that regulations that applied to print journalism companies were not applicable to news aggregators who used their content: “We have an FDI cap of 26%. But at the same time, news aggregators, those who take the news from our newspapers and put it on digital platforms, they have no cap,” Agarwal complained. “In fact, current news aggregators are owned and funded by Chinese companies. We were surprised to see when the 59 apps were banned, and these Chinese who were interfering in the news of the country, they’ve been left alone.”
That claim isn’t entirely true — UC Web, a very popular Alibaba-backed browser that also has its own India-specific news aggregation app, was one of the 59 Chinese apps that was banned by the government last week. UC News, the aggregator app by UC released for the Indian market, was also banned.
Read: Why new FDI rules for digital media companies are regressive for the internet space in India (September 2019)
FDI in Digital Media
Last August, the government capped the FDI that digital media in India could receive to 26%. Previously, since there was no guidance, investment was not capped. Even now, the government has not offered any clarity on exactly what comes under digital media and what does not. For example, does this exemption apply equally to small blogs as it does to larger news outlets? Does it apply to aggregators or not? If a TV news channel, which is allowed to receive up to 49% FDI, is livestreaming its channel online, how does that differentiate it from a digital-only player? The Internet and Mobile Association of India also questioned the 26% cap, saying it would also hinder Indian digital media companies from achieving global scale.
In April, the Department for Promotion of Industry and Internal Trade said that it would review all investments from countries with which India shares a land border, a move China decried as discriminatory.
On Sunday, the Financial Times reported that US$100 million in funding that Zomato had announced in January was stuck in this review. InfoEdge, which owns a stake in Zomato, confirmed this in an earnings call on June 23.