New Delhi: Despite the Union Cabinet approving 26 per cent foreign direct investment in digital news media almost a fortnight ago, confusion persists on the issue as the sector continues to see it as an attempt at regulating online content and restricting the industry’s growth.
Sources stated that the sector continues to be hit by confusion as the government is yet to outline both its objective and intent. The move, being seen as an attempt to regulating the digital news content in the country, has been apparently stuck between the Union information technology, and Information and broadcasting ministries (I&B) over issues regarding its jurisdiction.
Industry sources stated that the Union Cabinet’s decision to bring in 26 per cent FDI norms in the sector has led to a confusion in the sector as several companies, including BBC India’s digital operations, stare at possible closure of its operation leading to job loss or legal troubles ahead.
The cabinet approval, which came on August 29, has also created a peculiar problem as web-based companies have so far come under the ambit of the Information Technology Act administered by the information and technology ministry.
However, the new law proposes to make the I&B ministry the nodal ministry to administer the proposed 26 per cent FDI ceiling and thus extend the scope of content regulation by the I&B ministry.
Sources stated that the companies registered in India have to go through the FDI process if their foreign investment goes beyond the prescribed limit of 26 per cent. The ministry is yet to finalise an FDI policy and made no further announcement ever since the cabinet decision, sources added.