Broadcasting in India: Hike FDI’s to 49% in FM Radio, 74% IN DTH: ASSOCHAM - PWC

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Pricehouse Watercoopers (PWC) have recommended to streamline “FDI’s regimes for Media &

Mumbai, India (Washington Bangla Radio) The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Pricehouse Watercoopers (PWC) have recommended to streamline “FDI’s regimes for Media & Entertainment Sector (M&E)” by asking government to hike FDI’s ceiling in FM radio from existing 20% to 49% and Direct To Home (DTH) services from 49% to 74%.

In addition, the two institutions have also proposed that foreign direct investment’s limit in Cable Networks  should go up to 74% from existing 49% and that of their share in Uplinking a News & Current Affairs TV Channel be raised to 49% from current levels of 26%.

The aforesaid suggestions emerged at a workshop on ‘Tax & Regulatory Developments in Entertainment & Media Industry’ jointly organized by ASSOCHAM & PWC here today in which it was pointed out that presently rules regarding FDI vary from segment to segment in M&E sector. This creates confusion and discourages foreign investors from investing in India’s M&E segment.

The workshop was attended by a number of tax experts from PWC and ASSOCHAM comprising ASSOCHAM Media and Entertainment Committee, Co-Chairperson, Mrs. Sujata Dev, Ms. Smita Jha, Consulting Head – E&M Sector, PwC India, Ms. Supriya Sahu, Director (Broadcasting), Mr. Akash Gupt, National Leader – Regulatory Services, PwC India and Mr. Ajay Kuma, Tax Marketing Leader & Executive Director, PwC India, besides Ms. Anita Rastogi, Associate Director – PwC India.

“There is a strong case for review of FDI policy to bring consistency in the policy and to provide a level playing field for competing technologies.  This issue has gain importance on account of increasing convergence in broadcasting and telecommunication technologies and the impact of this convergence on competition in the market”, felt the panelists.

They pointed out that 20% FDI’s permitted in FM radio segment are also subject to approvals of Foreign Investment Promotion Board (FIPB). In addition, Ministry of Information & Broadcasting and Wireless Operating Licence from Wireless Planning & Coordination (WPC) Wing, which falls under jurisdiction of Ministry of Communications too have roles in 20% FDI’s permitted in FM radio.

The process even now is too cumbersome to woo FDI’s in FM segment and thus needs to be not only reviewed with single window clearance but also required to be hiked to propose limit of 49%.

Similarly, in cable networks, 49% of FDI ceiling is subject to FIPB approval which also requires registration with the Head Postmaster of the area within whose territorial jurisdiction, the office of the cable operator is situated.  In addition, Multi-System Operators who provide cable television services require Ministry of Information & Broadcasting permission. This also needs to be made simpler so that FDI’s do not shun India’s M&E sector for parking their surpluses.

In Direct-to-Home Services, current ceiling of FDI’s is 49% provided FIPB approves such investments. Licence from I&B in consultation with Ministry of Home Affairs and Department of Space also needs to be taken simultaneously.  Standing Advisory Committee for Frequency Allocation (SACFA) clearance is also required from Wireless Planning & Coordination Wing from Ministry of Communications.  Shouldn’t it be reviewed urgently, paving waves for higher FDI’s in DTH, asked the tax experts?

In Uplinking a news and current affairs TV channel, the FDI’s ceiling currently prescribed is to an extent 26% that too with FIPB approvals.  It also requires licence from MI&B in consultation with Ministry of Home Affairs (MHA) and makes it little luring for FDI’s to stay on to this segment of M&E sector.

Both the institutions have, therefore, urged the government to consider it’s proposals as regards to streamline FDI’s regime for M&E sector so that it grows at the required pace and catch up with the best existing in developed and developing economies.


Supratim Sanyal
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