UA-177830497-1China impact: Digital media units to be tightly regulated VMediaNetwork

China impact: Digital media units to be tightly regulated


The government says Friday’s clarifications follow stakeholders’ demand for clarity on certain aspects of the FDI policy for digital media news space.

The government on Friday said the chief executive of a digital media outlet located or registered in India and majority of its directors have to be Indians, as it notified rules under which up to 26% foreign direct investment (FDI) in such entities will be permitted through official approval.

The move seems aimed at curbing the influence of Chinese or other foreign-owned digital media news entities that, the government thinks, may be hostile to the country’s interest. It also fills in an existing regulatory void in the digital media space, unlike the broadcast media sector that is tightly regulated.

The department for the promotion of industry and internal trade clarified that the 26% FDI in digital media rule will apply to entities uploading/streaming news and current affairs on websites, apps, other platforms; news agencies which supply news to digital media entities and/or news aggregators; news aggregators which, using software/web applications, aggregate content from various sources in one location.

The government says Friday’s clarifications follow stakeholders’ demand for clarity on certain aspects of the FDI policy for digital media news space.
The DPIIT has given one year to digital media news entities to align their shareholding pattern with requirements.

The government had in September last year made it clear that up to 26% FDI will be permitted in digital media news entities, with government approval. Prior to this move, up to 26% FDI was allowed in print media and 49% was permitted in broadcasting content services — both through government approval. However, the rules were silent on the digital media space, which assumed prominence only in recent years, with the emergence of several such entities.

“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,” the DPIIT said.

“In the event of security clearance of any of the foreign personnel being denied or withdrawn for any reasons whatsoever, the investee entity will ensure that the person concerned resigns or his/her services are terminated forthwith after receiving such directives from the government,” it added.

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