India loosens digital media investment regulations
Details
Rebecca Hawkes
| 29 August 2019

The Indian Government is to allow 26% foreign direct investment (FDI) in digital media platforms, to bring them in line with existing investment parameters for print media.

Approvednews and current affairs TV channels already are permitted 49% FDI in India, while 100% FDI has been allowed in non-news channel and broadcast distribution services like cable, direct-to-home (DTH), and headend in the sky (HITS) platforms.

Indian video streaming services such as Viacom’s VOOT or ZEE5 could potentially now be listed as separate companies and raise their own investment, following the decision by the union government.

“All digital media was simply subsumed under the broader legal entity it was part of, broadcasting or otherwise," Jehil Thakkar, partner at Deloitte India, told Live Mint. “This will now allow digital platforms to be unlocked from the bigger companies and seek separate valuation."

Finance minister Nirmala Sitharaman has already announced that the union government is looking to open up the foreign direct investment (FDI) in the animation, visual effects, gaming and comics (AVGC) industry.

The FDI Policy amendments aim to liberalise, simplify and ease the conduct of business in the country, leading to larger FDI inflows and ultimately contributions to the growth of investment, income, and employment.

“Despite the dim global picture, India continues to remain a preferred and attractive destination for global FDI flows. However, it is felt that the country has the potential to attract far more foreign investment which can be achieved inter-alia by further liberalising and simplifying the FDI policy regime,” the government said.

Total FDI into India from financial year 2014-15 to 2018-19 has been $286 billion as compared to $189 billion in the five year period prior to 2014.

“FDI in digital media is a welcome development. Clarity around this fast-growing segment of the media industry will act as an enabler for capital infusion. Significant value will be unlocked going forward,” said Deloitte partner Jehil Thakkar.