I&B Ministry Asks Digital Media To Limit FDI To 26%

The Ministry of Information and Broadcasting (I&B) on Monday issued a notice asking entities involved in the streaming of news and current affairs through digital media to comply with the Centre's earlier order permitting 26% foreign direct investment under the government approval route to such entities.

The ministry, in its notice, has laid out detailed actions to be undertaken by eligible entities to comply with the government's September 2019 decision within a month.

According to the notice, entities having foreign investment below 26% are required to furnish an intimation to the I&B Ministry within one month and give details of the company and its shareholding pattern along with the names and addresses of its directors/shareholders.

It has directed such entities to also provide the names and addresses of its promoters/significant beneficial owners and also a confirmation concerning 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.

The notice further stated that entities which have an equity structure with foreign investment exceeding 26%, would give similar details as above to the ministry within one month, and also take necessary steps for bringing down the foreign investment to 26% by October 15, 2021, and seek approval of the ministry.

The ministry also said that 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 DPIIT.

Furthermore as per the notice, "Every entity has to comply with the requirements of citizenship of the Board of Directors and of the Chief Executive Officers (by whatever name called). The entities are required to obtain security clearance for all foreign personnel likely to be deployed for over 60 days in a year by way of appointment, contract or consultancy or any other capacity for the functioning of the entity, before their deployment."

"For this purpose, the entities will apply to the ministry at least 60 days in advance and the proposed foreign personnel shall be deployed by the entity only after prior approval of this ministry," the public notice stated.

The development comes just a week after the Centre brought OTT platforms like Netflix, Amazon Prime Video, besides other online news and current affairs content under the I&B Ministry, giving it powers to regulate policies and rules for the digital space.