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The Union Government have decided to allow, with immediate effect:
(i) Foreign Direct Investment (which includes foreign direct investments by NRIs, PIOs) and portfolio investments by recognized FIIs, together up to a ceiling of 26% of paid up equity capital, in Indian entities publishing newspapers and periodicals dealing with news and current affairs. Such investment would be permissible by foreign entities having sound credentials and international standing, subject to certain conditions.
(ii) Facsimile editions, in whole or in part(s), of foreign newspapers, by Indian entities, with or without foreign investment, and also by foreign companies owning the original newspapers, provided they get incorporated and registered in India under the Companies Act, 1956.
Eligibility Criteria
A. Foreign Investment in Indian entities publishing newspapers and periodicals dealing with news and current affairs:
(i) Foreign Investment will be allowed only where the resultant entity (hereinafter called “New Entity”) is a company registered with the Registrar of Companies under the provisions of the Companies Act, 1956.
(ii) Foreign Investment including FDI by foreign entities, NRIs, PIOs etc., and portfolio investments by recognized FIIs, will be allowed up to a maximum of 26% of paid-up equity of the New Entity.
(iii) Permission will be granted only in cases where equity held by the largest Indian shareholder is at least 51% of the paid-up equity, excluding the equity held by public sector banks and public financial institutions, in the New Entity.
(iv) At least 50% of the foreign direct investment will have to be inducted by issue of fresh equity. The balance, viz. up to 50% of the foreign direct investment, may be inducted through transfer of existing equity.
B. Facsimile Editions of foreign newspapers:
(i) The Indian entities publishing facsimile editions of foreign newspapers, with or without foreign investment, shall be subject to eligibility criteria as laid down at ‘A’ of these guidelines.
(ii) Any foreign company owning the original foreign newspaper will be permitted to publish the facsimile edition of its newspaper provided
(a) It is incorporated and registered as a company with the Registrar of Companies.
(b) It has a commercial presence in India with its principal place of business in India.
(c) That at least 3/4th of the Directors on the Board of Directors of the New Entity and all key executives and editorial staff are resident Indians.
Some of the Basic Conditions/Obligations for Facsimile editions are:
(i) The facsimile edition shall not carry any advertisements aimed at India readers in any form.
(ii) The facsimile edition shall not carry any locally generated content/India specific content, which is not simultaneously published in the original edition of foreign newspaper.
(iii) Prior permission from Ministry of I&B is obtained for publication of facsimile editions and the title got registered with the Registrar of Newspapers for India.
(iv) The applicant Entity shall make full disclosure, at the time of application, of Shareholders’ Agreements and Loan Agreements that are finalized or proposed to be entered into. Any subsequent change in these would be disclosed to the Ministry of I&B within 15 days of such a change.
Detailed guidelines are available on the I&B Ministry website http://mib.nic.in. The new guidelines supercede the previous ones issued by the Ministry of I&B on November 21, 2002.
RS/AS
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