New Delhi: The Narendra Modi government has issued a detailed set of actions to be undertaken by digital media entities to ensure they comply with its policy under which they are allowed to have 26 per cent foreign direct investment or FDI.
The notice was issued Monday by the Ministry of Information and Broadcasting, headed by Prakash Javadekar, just five days after digital news websites and OTT platforms like Netflix, Amazon Prime and Hotstar were brought under its jurisdiction.
The government had, last year, approved FDI of up to 26 per cent for entities in the digital news sector, through the government-approval route.
A senior government official told ThePrint that unlike TV and print media entities, the government does not have details of digital media entities, as they are currently not registered with it. “Now that they come under the ministry, we have asked them to provide details in a month,” an I&B ministry official said.
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What digital news sites need to do
The public notice issued by the I&B ministry Monday states that an eligible entity (digital news outlet) having foreign investment below 26 per cent should furnish an intimation to the I&B ministry within a month, providing details of the company, its shareholding pattern, and the names and addresses of its directors and shareholders.
The notice also says such outlets should provide to the ministry the names and address of promoters or significant beneficial owners, and a confirmation with regard to compliance with pricing, documentation and reporting requirements under the “FDI Policy, Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and Foreign Exchange Management (Mode of Payment and Reporting of Non-debt Instruments) Regulations, 2019, aside from copies of relevant reporting forms in support of the past/existing foreign investment and downstream investment(s)”.
The companies would also be required to provide the Permanent Account Number and the latest audited unaudited profit & loss statement and balance sheet, along with an auditor’s report.
Digital news companies that currently have an equity structure with FDI exceeding 26 per cent will have to give similar details to the I&B ministry within a month, and take steps to bring down the foreign investment to 26 per cent by 15 October 2021.
The ministry’s notice said any entity which intends to bring fresh foreign investment in the country has to seek prior approval of the central government, through the Foreign Investment Facilitation Portal of the Department for Promotion of Industry and Internal Trade (DPIIT).
Rules issued earlier by the Ministry of Commerce state that every entity will have to ensure that the CEO of the company is an Indian citizen, and that all foreign employees working for more than 60 days would need security clearance. The security clearance rules are applicable to digital news and television news companies, but not to the print media.
An application seeking clearance will have to be sent to the I&B ministry at least 60 days in advance, the public notice states, adding that the foreign personnel will be employed by the entity only after the I&B ministry’s approval.
There was no FDI policy for the digital news media sector earlier. FDI in print media is capped at 26 per cent, while in TV news, the cap is 49 per cent.
Also read: Javadekar notes absence of self-regulation by OTT platforms, says looking into suggestions
about time. i wonder why these basic regulations take so long to implement.