I&B for FII money in print, news channels

Process to amend present foreign investment norms in media sector started.

The information and broadcasting ministry has proposed that foreign institutional investors (FIIs) be allowed to invest in newspapers and television news channels.

The investment, however, will have to be within the present foreign direct investment (FDI) sectoral limit of 26 per cent.

"A Cabinet note to this effect has been moved and the government does not find any reason to not allow FIIs to invest," said Information and Broadcasting Minister S Jaipal Reddy. The present norms do not allow FIIs to invest in either newspapers or television news channels.

The government has started the process for amending the present guidelines governing foreign investment norms in the media sector.

This move by the government comes at a time when it has set up a group of ministers (GoM) to work out laws to regulate newspapers and FDI, and to allow publishing of local editions of foreign newspapers.

The move to allow FII investment in local television news channels will come as a big relief to broadcasters listed on stock exchanges.

These channels had pointed out to the government that they were finding it difficult to meet the present norms as FIIs were picking up their stock from the market. Besides, it was also pointed out that FII investments were required for a successful listing of a company.

This will also be relief to channels like Zee Business and CNBC-TV18, which have FII investments and need to restructure their equity capital before the government allows them to uplink from India.

So far, the channels have a temporary uplinking permission as the deadline to meet the norms expired in December.

On the issue of hiking the FDI limit in newspapers, the information and broadcasting minister said the GoM had looked into the issue and had informally decided against it. "We had sought opinion from various groups and have taken the view that it does not have to be raised," Reddy said.

He also said the GoM was examining a move to allow international publications to print local editions in India. "We are yet to take a view on this," he said.

It was pointed out that the GoM was of the view that, as international newspapers were available on the Internet, it should be allowed to be printed locally.

Reddy said the GoM had also informally decided to increase the limit of syndicated international content in Indian newspapers from the present 7.5 per cent. The GoM is, however, yet to work out the new limit.

Officials said various television channels had been urging the government to increase the FDI limit and also permit FII investments above the current cap.

Some channels also wanted the government to allow higher FDI limit in a holding company, while an operating company would have FDI within the cap.