Saturday, December 13, 2008

Indian Govt mulls lowering FDI cap in newspaper fax editions

Anindita Dey - Business Standard / Mumbai December 13, 2008

The Department of Industrial Policy and Promotion (DIPP) has sought a review of foreign direct investment (FDI) in facsimile edition of foreign newspapers in India.

Ministry officials said the matter is being reviewed with the objective of bringing down the FDI cap from 100 per cent to 26 per cent in line with the limit for news media. This decision for the review was taken while discussing the proposal of US-based Dow Jones and Company for setting up a wholly-owned subsidiary to carry out publishing the facsimile edition of Wall Street Journal (WSJ) in India.

DIPP is an arm of the government which is responsible for formulating the Foreign Direct Investment (FDI) Policy in various sectors in consultation with ministries of specific sectors and also looks after promotion, approval and facilitation of FDI.

The issue came up for discussions at a meeting of the Foreign Investment Promotion Board (FIPB) on Friday. Sources added that the finance ministry, which also attended the meeting, was of the view that the FDI in facsimile editions is understood to be 100 per cent in line with other broadcasting services, except for news print media.

However, the DIPP countered the view of the finance ministry stating that the policy is not very clear on the 100 per cent FDI in fax editions stating that there is no established policy on this issue till date. Sources added that the proposal of Dow Jones has been postponed for the time being till the policy on FDI in fax editions is clear. This will be shortly done by putting up a Cabinet note which will outline the policy on FDI in the sector.

Incidentally, the FIPB cleared two proposals from Mauritius-based companies in the financial services sector, and one from a venture capital fund at today’s meeting.

Earlier in July 2007, the government approved a 26 per cent FDI cap in the Indian print media and permitted facsimile editions of foreign newspapers after revising its earlier guidelines issued in November 2002.

It had also issued guidelines for syndication arrangements between Indian newspapers and their foreign counterparts whereby it limited the foreign content to 20 per cent of the total printed area of the newspapers.