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FDI likely to be permitted in Indian wire services
Thursday, 16 January 2003, 20:30 IST
NEW DELHI: Indian wire services may get a shot in the arm with the government considering permitting foreign investment in news agencies, a provision already allowed to all other forms of media.
This would mean reviewing a 1956 cabinet resolution, which also bars foreign agencies from distributing news in India.
"We are actively considering removing the restriction on foreign investment in wire services," an information and broadcasting ministry official said Thursday.
The official said the component of foreign direct investment (FDI) allowed for news agencies could be higher than that permitted for news and current affairs journals.
The decision could take around a month, he said. "We think that there is no justification in keeping news agencies out when we have permitted foreign investment in all other forms of media."
In June last year, the cabinet allowed 26 percent FDI in newspapers and journals dealing with news and current affairs and 74 percent in the non-news media. At the time, a decision on news agencies was kept in abeyance.
In opening news and current affairs publications to foreign funds, the government imposed a string of restrictions including that the largest Indian shareholder should control at least 51 per cent equity and that at least three-fourths of any new entity's board of directors, key executives as well as editorial staff should be resident Indians.
Though wire services deal with news and current affairs, the government may allow a higher FDI cap, said the official.
The existing policy for operation of foreign news agencies in India is governed by the 1956 cabinet resolution: "Communication facilities should be granted to foreign news agencies only where the distribution of news within the country is to be effected through an Indian news agency owned and managed by Indians, which would have full and final authority in the selection of foreign news for distribution and which would also be in a position to supply Indian news in a reasonable volume to the foreign news agency with whom they have a working arrangement."
But foreign news agencies are allowed to directly distribute financial news to select clients for their use and not for further reproduction and publication.
Commenting on the proposed move, N. Bhaskara Rao of the Centre for Media Studies said it would bring about some modernisation and professionalism in India's languishing news agencies.
"I don't see any reason for leaving out news agencies if FDI is allowed in all other media. Foreign agencies are already in India and doing stable business."
Rao, who has conducted studies on agencies such as Press Trust of India and United News of India, said: "Both agencies have understandings with international agencies that are reviewed every year. Now they can have a formal business arrangement."
Source: IANS
Source: IANS