Amid concerns from media companies regarding imposition of 26 per cent limit on foreign direct investment (FDI) through the government route in the digital media sector, the Centre is mulling on coming up with a clear decision on how media companies having over 26 per cent foreign share holding should be treated, reports The Hindu Businessline.
“The DPIIT (Department for Promotion of Industry and Internal Trade) has received numerous queries on the implications of the FDI limit of 26 per cent in digital media. It is closely examining its options regarding the fate of the companies that already have FDI greater than 26 per cent. Most other concerns need only some clarifications and explanations,” an official was quoted in the report as saying.
According to the report, the Ministry of Information and Broadcasting has sent its view on the matter to the DPIIT, which is examining it.
“A decision could be taken based on a common understanding of the matter and in consultation with other key Ministries such as Finance,” the official said.
Earlier in August this year, the DPIIT came up with a press note permitting 26 per cent FDI under government route for uploading/streaming of news and current affairs through digital media. Although, FDI caps existed for the Indian print media at 26 per cent and news broadcast television companies at 49 per cent. However, there was no such cap for digital media prior to August.
“As per the available options, digital media companies with more than 26 per cent FDI could be asked to divest their stake till they reach the permitted limit. Alternatively, a certain amount of grand-fathering could be allowed to permit companies that have been set up before a threshold period to continue to do business without being subject to FDI caps,” an industry source was quoted in the report.
The Industry source added that other proposals could also be looked at by the government.
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