As reported, in August, the government had approved permitting 26% FDI under government route for uploading/streaming of news and current affairs through digital media, on the lines of print media. However, industry players and experts have stated that the move to cap FDI in the sector to 26% throws up questions that need clarifications as some of those who were looking to raise funds could be restricted.
As per DPIIT official, matters are clarificatory in nature and FDI in the sector is permitted through the government approval route, so the ministry has to be consulted.
The issue was also raised by the Internet and Mobile Association of India which has sought clarification on the issue. In a representation to the DPIIT, it stated that the decision would have impact on start-up ecosystem as continued FDI is critical to enable Indian digital media start-ups to achieve global scale.
Association said: “Several foreign strategic intermediaries have set up their operations in India, as digital media was categorized as 100 per cent FDI under the automatic route. A clarification on the non-applicability of the new FDI measure would be critical for them to continue making massive investments in India.”