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Approval for FDI — Speciality mags may need to stay separate

Nithya Subramanian

NEW DELHI, Oct. 21

FOR domestic media companies, raising capital from foreign investors could well mean taking a difficult decision. That of cutting their umbilical cord.

The Government is now considering a proposal to insert a clause wherein domestic companies may have to hive off their various speciality magazines into separate companies, to obtain approval for sourcing foreign direct investment (FDI).

According to officials in the Information and Broadcasting Ministry (I&B), "Up to 74 per cent FDI would be permitted in individual journals, and not in a group.'' The Government, in a landmark decision in June this year, had decided to permit 74 per cent foreign investment in the non-news and non-current affairs journals and 26 per cent FDI in news and current affairs publications.

The Government is also planning to set up a committee comprising officials from the I&B Ministry, Home Ministry, Finance Ministry and other Ministries to scrutinise the applications and ascertain the character of the magazine.

"If an FDI proposal involves a sports magazine, then an official from the Sports Ministry would be present to give the Ministry's views and if it is a technical journal, an official from the Science and Technology Ministry would be present,'' said an official.

The I&B Ministry is also planning to impose iron-clad conditions on the issue of retaining the character of the magazine.

Magazines, that have received clearances for a particular genre of content, would not be allowed to change the content later.

A Ministry official elaborating on this said: "A fashion magazine would have to remain a fashion magazine and cannot change. If the I&B Ministry notices any change in content, the violation could be referred back to the Committee. Stringent action is being envisaged in the case of violations,'' he added.

These are part of the recommendations of the Ministry which are likely be considered at the Inter-Ministerial Group slated to meet on Tuesday.

According to sources, while there are really no impediments in permitting FDI in non-news and non-current affairs journals, the tricky issue is formulation of safeguards for news and current affairs publications.

For example, the Government has no problem in permitting portfolio investment in non-news and non-current affairs publications where 74 per cent foreign investment is permitted; but it is not in favour of allowing such investments in news and current affairs publications.

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