TRAI recommends hike in FDI for news television & FM broadcasters

Finally there’s some good news for the news television and the private FM radio broadcasters. The Telecom Regulatory Authority of India (TRAI) has recommended a hike in the foreign direct investment (FDI) limit in news television and private FM radio broadcasting to 49 per cent from 26 per cent. This is on the direction of the Ministry of Information and Broadcasting (MIB) which had asked  TRAI’s suggestion on the matter. 

TRAI has also recommended a 100 per cent FDI in distribution and carriage services such as direct-to-home television, cable networks and mobile TV from 74 per cent through the Foreign Investment Promotion Board (FIPB) route.

The MIB had sent a reference to TRAI indicating that the Government is re-examining the current FDI policy with a view to easing FDI inflow and liberalising the limits/caps. In this context, MIB has requested the Authority to examine the FDI limits of various segments in the broadcasting sector and to furnish its recommendations.

Most of the stakeholders, including the industry associations, DTH operators, FM radio operators, teleport operator, broadcasters etc. have supported the proposed enhancement of FDI limits in carriage services from 74 per cent to 100 per cent. They have stated that enhancement of FDI limits will speed up the pace of digitization across India. This will also help build information highways of the future that will support India’s economic development and enable the social infrastructure. It has been further stated that enhancement of FDI limit to 100 per cent i.e. complete ownership, may also attract investors who wish to bring in state-of-the-art proprietary technology.

As far as the approval route for the FDI is concerned, most of the stakeholders have stated that it should be through automatic route. They have stated that the FIPB approval process is time consuming and the delay is so long that the investor loses interest in making any investment. Several broadcasters and industry associations are of the view that if the Government’s concern is about the origin of FDI, the Government may consider notifying a negative list of countries, FDI from which would have to go through the FIPB route and investment from other countries could be allowed through the automatic route.

TRAI has recommended that the government should ensure that the process of FIPB approval is streamlined and the requests for FDI are processed in a time-bound manner. Since content can be sensitive in nature, it is appropriate to have checks and balances at different stages viz. to screen for any potential hazard from a national perspective. In view of these considerations, the status quo ought to be maintained regarding the route for approval of any FDI,” Trai said in its recommendations.
The following is the summary of TRAI’s recommendations.