MINISTRY OF INFORMATION & BROADCASTING FOREIGN� INVESTMENT POLICY

Ministry of Information and Broadcasting is the nodal Ministry for formulation of policies on foreign investment in broadcasting, film, print and advertising sector. It invites foreign investment and frames laws keeping an eye on the widest national interest.

ADVERTISING SECTOR
Following guidelines for foreign direct investment in advertising sector is being pursued : There should not be any cap on the percentage of foreign investment in a new or greenfield project. Where the proposal is for a new joint venture or enhancing foreign direct investment in an existing joint venture, foreign direct investment should be limited to 74%. In exceptional cases, the 74% limit could be relaxed to go up to 100% with the consent of the Indian partner/partners and subject to the justification being established to the satisfaction of the Government. Where a foreign company/investor already has a joint venture in this sector, a new wholly owned subsidiary shall normally not be permitted, unless there are strong reasons to make such an exception. Foreign Direct Investment would include all repatriable investment, irrespective of who or what the investor is. Such investment would be permitted through the automatic approval route.

ELECTRONIC SECTOR
Foreign investment proposals directly linked to Broadcasting will be kept pending till Broadcasting Law comes into effect. Presently, companies with 80% Indian equity may be allowed to uplink for satellite channels. The proposals related to production of software and marketing of TV rights, airtime, advertisements, etc. may be recommended with the condition that� All future laws on Broadcasting will be applicable to them and they will not claim any privilege or protection by virtue of this approval;�

They will not undertake any broadcasting from Indian soil unless specially permitted to do so;� Companies desiring to market TV software in India will in addition to conditions mentioned at (a) and (b) above will observe the Programme Law and Advertisement Codes of Doordarshan. Proposals having an Indian equity of atleast 25% will be encouraged, however, in genuine cases, even 100% foreign equity can be allowed. There is no foreign equity allowed in private FM broadcasting (to be introduced).

RINT MEDIA
Foreign ownership of newspapers and periodicals in India and publication of their Indian editions is guided by the Cabinet decision of 13th Sept., 1955. The relevant extracts of the decision are : * No foreign owned newspapers and periodicals should, in future, be permitted to be published in India. Foreign newspapers and periodicals which deal mainly with news and current affairs should not be allowed to bring out Indian editions. * Above decision was taken on recommendation of the First Press Commission, which inter-alia had observed that proprietorial interest in the daily and weekly newspapers should predominantly vest in Indian hands. It also considered Indianisation of both capital and staff desirable, especially at the higher level.

It was felt that newspapers should not be viewed similar to an industry since their true function was to influence working of democracy by shaping public opinion. Foreign participation in ownership or control of newspapers could be used for purpose of influencing Indian opinion in support of foreign interest and in some cases such participation could be at the instance of a foreign Government as well. * In pursuance of the above decision, this Ministry has since 1955, consistently denied permission for any foreign equity holding in print media or publication of Indian editions of foreign newspapers and periodicals. Due to many developments taken since then in the overall media scenario in the country and grant of Open General Licence to foreign newspapers and magazines, which resulted in their easy availability in the market, efforts are being made to review the 1955 Cabinet decision.

FOREIGN OWNERSHIP OF NEWS AGENCIES:
The existing policy of foreign ownership of news agencies in India is governed by the Cabinet decision of 1956 which was also based on the recommendation of the first Press Commission.

The relevant extracts of the decision is reproduced below : *Communication facilities should be granted to foreign news agencies only where the distribution of news within the country is to be effected through an Indian news agency owned and managed by Indians, which would have full and final authority in the selection of foreign news for distribution and which would also be in a position to supply Indian news in a reasonable volume to the foreign news agency with whom they have a working arrangement.

This decision has been the yardstick for examining requests of foreign news agencies to operate in India. Direct distribution of financial news by foreign news agencies is not violative of the 1956 Cabinet decision. Subsequent to this decision, this Ministry conveyed to its no objection to the permission accorded by RBI to M/s Reutors, subject to the condition that their financial services would be only for selected Indian non-media clients for their own use and not for reproduction and public distribution.