26% FDI applies to digital media, news aggregators

New Delhi: The government on Friday issued a clarification to its September 2019 policy that allowed up to 26% foreign direct investment (FDI) in the ‘news digital media sector’ through the approval route. It explicitly covers aggregators and could affect entities such as Dailyhunt, Inshorts, experts said. The policy will apply to Indian entities registered or located in the country that are digital media entities streaming or uploading news and current affairs on websites, apps and other platforms.

The guidelines will also cover news agencies that gather and supply news, directly or indirectly, to such digital media entities and aggregators. Also included are news aggregators – which use software or web applications – to aggregate content from various sources such as news websites, blogs, podcasts, video blogs and user-submitted links and such others at one location.

Those entities covered by the policy “would be required to align their FDI to the 26% level with the approval of the central government witin one year from the date of issue of this clarification,” the Department for Promotion of Industry and Internal Trade (DPIIT) said. DPIIT said it had received representations from stakeholders seeking clarifications on certain aspects of the policy. As per the clarification, the entities covered by the policy have to also comply with certain conditions. A majority of directors and the chief executive officer have to be Indian citizens. Any foreign personnel will require security clearance.

“The entity shall be required to obtain security clearance of all foreign personnel required to be deployed for more than 60 days in a year by way of appointment, contract or consultancy… prior to their deployment,” DPIIT said. Moreover, in case of withdrawal or denial of security clearance, the investee company needs to ensure that the person concerned resigns or their services are terminated. The Ministry of Information & Broadcasting said on Friday it will consider the extension of various benefits such as government accreditation, concessional rail fare and eligibility for digital advertisements, which are currently available to traditional media to digital media news entities as well.

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