Trai seeks stakeholders' views on raising foreign investment threshold in media

Written by fe Bureau | New Delhi | Updated: Jul 31 2013, 15:45pm hrs
In order to ease the flow of foreign direct investment (FDI) across various sectors, including broadcasting, the telecom regulatory authority of India (Trai) on Tuesday sought comments from stakeholders on increasing the current FDI cap across carriage services from 74% to 100% and in content (news channels, FM radio) from 26% to 49%.

In a statement, Trai said the last date of sending in stakeholders suggestions and comments is August 12. Carriage services include DTH, cable TV, teleport, HITS and mobile TV, while content services include news broadcast on television and FM radio network. Trai has also sought comments from stakeholders on increasing the FDI cap in FM radio from 26% to 49% via the government approval route.

The move to increase the FDI caps across sectors has been proposed by the Mayaram committee last month. It proposed two FDI caps in most sectors one to be kept at 49% and other at 100% thereby doing away with multiple caps currently in place that includes FDI caps at 26%, 49%, 51%, 74% and 100%, including sub-caps on the quantum of foreign direct investments, foreign institutional investments made by non-resident Indians.

Subsequent to the Mayaram committee's recommendations, the information and broadcasting ministry wrote to the sector regulator Trai, seeking its comments for broadcasting sector last month. The current consultations paper of FDI in broadcasting sector in an outcome of that request, Trai said.

In its consultation paper, Trai said there are existing provisions in the uplinking guidelines to safeguard management and editorial control in news creation such as mandatory appointment of Indians in key positions, including CEO, CFO, and 3/4th directors on board of directors, editorial staff with 51% shareholding vested in Indian shareholders.

"If the FDI limit in uplinking of TV channels of the news and current affairs category is enhanced to 49%, then as per provision the remaining Indian shareholding (51%) would have to be with a single Indian shareholder...Whether or not any changes are at all required in these conditions is the issue on which the stakeholders may wish to make suggestions," Trai said.

Trai has also sought comments on having a proper content monitoring and regulations through a content code instead of using FDI limits in news and current affairs.

Currently, the FDI limit in carriage services is 74%, of which 49% is permissible through the automatic route.

Any FDI beyond 49% has to go through the FIPB route. Trai said the government is now contemplating enhancement in the FDI limit for telecom services to 100% with FDI up to 49% through the automatic route and FDI beyond 49% through the foreign investment promotion board (FIPB).