New Delhi: The Centre on Friday announced that news aggregators, news agencies will have to comply with the 26 per cent foreign investment cap.
The CEO of the company would have to be an Indian citizen, and all foreign employees working for more than 60 days would need security clearance are some of the rules underlined by the government.
The 26 per cent FDI rule could help the government in tightening the noose on Chinese and other foreign companies who are making investments in digital media in the country. Daily Hunt, Hello, US News, Opera News, Newsdog are some of the Chinese or foreign controlled-digital media companies. They can hurt India's interests and influence elections like the US Presidential elections 2016.
In August 2019, the Union Cabinet had approved 26 per cent foreign direct investment (FDI) under government route for uploading/streaming of news and current affairs through digital media, on the lines of print media.
Now, the companies will be required to "align their FDI to the 26 per cent level with the approval of the central government, within one year from the date of issue of this clarification", the Department for Promotion of Industry and Internal Trade (DPIIT) said.
All digital media news institutions have been given one year time to meet shareholding requirements.
The department said that it had received representations from stakeholders seeking clarifications on certain aspects of this decision. A few experts and people from the industry had stated their reservations and said that the move throws up questions which need clarifications.
"After due consultations, it is clarified (that) the decision of permitting 26 per cent FDI through government route would apply" to certain "categories of Indian entities, registered or located in India," it said.
The categories are - entities uploading / streaming news and current affairs on websites, apps, other platforms; news agencies which gathers, writes and distributes/transmits news, directly or indirectly, to digital media entities and/or news aggregators; news aggregators which, using software / web applications, aggregates news content from various sources, such as news websites, blogs, podcasts, video blogs, in one location.
The rules have brought with the objective to create a self-reliant and responsible digital news media ecosystem. The company would also have to adhere to certain conditions such as the majority directors on the board of the firm shall be Indian citizens; the chief executive officer shall be an Indian.
"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," it said.
It paves way for true FDI investments that are not prejudicial to Indian interests.
Indian interests will get priority as there is a real threat of fake news and information warfare especially from neighboring countries. These policy decisions will purportedly help in removing such threats.
Indian digital media companies will get a level playing field.