The review of print media policy permits Indian publishers entering into such agreements to include local content and carry domestic advertisements, both of which were forbidden under previous guidelines. Indian media houses now hope that the FDI limit in the sector would also be eventually raised to 49% from the current 26%.
Ashish Bagga, CEO of the India Today Group, Indias largest magazine publication house, told FE, We welcome the move. It was a longstanding demand of the magazine industry that will enable most international magazines to launch their Indian editions. Readers will now have greater access to international magazines, which will also come at more economical rates now. We now look forward to the government raising the FDI cap to 49%.
Several Indian publishers already distribute overseas editions of international news magazines, even locally printed facsimile copies. The Outlook Group, for instance, distributes Newsweek, while Fortune and Time magazine, among others, are distributed by the India Today Group. However, a yearly subscription to Time costs Rs 2,484 and that for Fortune Rs 2,470, after 48% savings on the cover price. The new policy allowing full-fledged Indian editions is expected to significantly reduce the cost of such subscriptions.
The governments new policy, however, retains the overarching print media riders on both the Indian and overseas partners in the joint venture. Three-fourths of the directors on the board of the applicant Indian company, as well as all key executives and entire editorial staff, would have to be resident Indian nationals.
Besides, the foreign publisher should have been published continuously for a period of at least five years, and the publication must have a circulation of at least 10,000 paid copies for the last financial year in the country of its origin, the official statement said.
The latest move comes as good news for publishers like Kolkata-based ABP group, which is reportedly awaiting permission to launch Fortune, and Mumbai-headquartered Network 18, which hopes to launch Forbes magazine by the end of the year.
The governments earlier relaxation of 2005-06, allowing Indian editions of foreign magazines in the non-news category, resulted in a flood of launches throughout 2007 and the first half of 2008. Fashion magazine Vogue was launched by Cond Nast in partnership with the India Today Group in 2007.
The group also entered into a licensing agreements with Rodale Inc of the US and Axel Springer of Germany to launch women's health magazine Prevention in 2007 and Autobild in 2008, respectively.
The Outlook Group also entered into an agreement with American publishing giant Time Inc to bring People magazine to India in 2008.
The Indian magazine publishing market is expected to grow to Rs 3,800 crore in 2012 from the current estimated size of Rs 1,900 crore. Advertising is projected to grow at 16% (compared to circulation revenues of 10%) to reach Rs 3,000 crore in 2012, from the current Rs 1,400 crore.