More than a year after announcing a 26 per cent foreign direct investment (FDI) cap under the government approval route in digital news, the government has said that the CEO of the company would have to be an Indian citizen, and that all foreign employees working for more than 60 days would need security clearance.
There was no FDI policy for “news digital media sector” earlier. FDI in print media is capped at 26 per cent, and that in TV news is 49 per cent.
The Commerce Ministry said the government had decided in September 2019 “to liberalise the FDI regime for entities engaged in the News Digital Media Sector”, and accordingly, these entities “have been permitted FDI upto 26% through the government approval route”.
The digital news media entities looking for FDI would have to adhere to three conditions, the Ministry said: the majority of the directors on the company’s board, and the CEO of the company will have to be Indian citizens and, “the entity shall be required to obtain security clearance of all foreign personnel likely to be deployed for more than 60 days in a year by way of appointment, contract or consultancy or in any other capacity for functioning of the entity prior to their deployment”. Should the government deny or withdraw security clearance, “the investee entity will ensure that the concerned person resigns or his/her services are terminated forthwith after receiving such directives from the government”, the Ministry note said.
A senior government official said the “security conditions for majority of directors and the CEO to be Indian citizens, and security clearance of foreign personnel were applicable to the broadcast content services sector”, that is, TV news, in FDI already. However, sources said there were no such conditions for print media. The official said the “threat of fake news, propaganda vehicles, foreign influence and interference in India’s domestic affairs is more real than ever, particularly from our hostile neighbours”. The government’s “policy prescription puts India’s national interest first and curbs these threats”, the official said.
The decision will be applicable to the following categories of entities registered or located in India: digital media entities “streaming/uploading news and current affairs on websites, apps or other platforms”; “news agency which gathers, writes and distributes/transmits news, directly or indirectly, to digital media entities and/or news aggregators”; and “news aggregator, being an entity which, using software of web application, aggregates news content from various sources, such as news websites, blogs, podcasts, video blogs, user submitted links, etc in one location”. The government has given a year to digital media news entities to align their shareholding with these requirements.
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