New FDI Policy for Digital Media – News and Current Affairs

The Government had, through Press Note No. 4 of 2019 dated September 18, 2019 (‘PN 4’), amended the law relating to FDI in digital media. Following PN 4, FDI in entities engaged in the uploading / streaming of news and current affairs through digital media was permitted only with the prior approval of the Government and only to the extent of 26%. FDI in such entities was not subject to any restrictions before the introduction of PN 4.

The Government has now, through a clarification issued on October 16, 2020, clarified that the entities to which the new policy would apply are: (i) digital media entities (which stream/upload news and current affairs on websites, apps or other platforms); (ii) news agencies (which gather writes and distribute/transmit news, directly or indirectly to digital media entities and/or news aggregators); and (iii) news aggregators (which use software or web applications, aggregate news content from various sources and such websites, blogs, podcasts, video blogs and user submitted links in one location). All these entities are required to align their FDI to 26% within one year from October 16, 2020.

Following these changes and notifications by the Ministry of Information and Broadcasting (‘MIB’), entities engaged in these activities are now required to comply with various requirements, including notifying MIB of their compliance with FDI regulations, proposals for reducing FDI (where required) and additional requirements in relation to Government approval for further capital infusions, citizenship requirements for directors and chief executive officers and prior security clearance for all foreign personnel deployed in India for more than 60 days.