The Department for Promotion of Industry and Internal Trade (“DPIIT”) issued a clarification dated October 16, 2020 on the Foreign Direct Investment Policy (“FDI Policy”) applicable to entities engaged in uploading/ streaming of news and current affairs through digital media. The Central Government had, by way of Press Note No. 4 of 2019 dated September 18, 2019, permitted entities engaged in the News Digital Media Sector to receive up to 26% (twenty six percent) foreign direct investment (“FDI”) through the Government approval route. On receiving representations from stakeholders who sought clarification, and after due consultation, DPIIT issued the following clarifications:
a) Digital media entity streaming/ uploading news and current affairs on websites, apps and other platforms.
b)News agency which gathers, writes and distributes/ transmits news, directly or indirectly, to digital media entities and/ or news aggregators; and
c) News aggregator, being an entity which, using software or web applications, aggregates news content from various sources, such as news websites, blogs, podcasts, video blogs, user submitted links etc. in one location.
These entities are required to align the FDI received till date to 26% with the approval of the Central Government within 1 (one) year of the issuance of the clarification.
a) The majority of directors on the board of the company shall be Indian citizens.
b) The chief executive officer shall be an Indian citizen.
c) Security clearances (“Clearance”) must be obtained for all foreign personnel who are deployed by way of appointment, contract or consultancy, or any other capacity, for more than 60 (sixty) days a year. The Clearance must be obtained prior to their deployment. In the eventuality that the Clearance is denied or withdrawn for any reasons, the investee entity is tasked with ensuring that the concerned personnel resigns, or has their services terminated after receiving the directive from the Government.
Please find a copy of the clarification here.
This update has been contributed by Suchita Ambadipudi, Partner and Pranav Valiathan Pillai, Associate.
7A, 7th Floor, Tower C, Max House,
Okhla Industrial Area, Phase 3,
New Delhi – 110020
The rules of the Bar Council of India do not permit advocates to solicit work or advertise in any manner. This website has been created only for informational purposes and is not intended to constitute solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work in any manner. By clicking on 'Agree' below, you acknowledge and confirm the following:
a) there has been no solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;
b) you are desirous of obtaining further information about us on your own accord and for your use;
c) no information or material provided on this website is to be construed as a legal opinion and use of this website will not create any lawyer-client relationship;
d) while reasonable care has been taken in ensuring the accuracy of the contents of the website, Argus Partners shall not be responsible for the results of any actions taken on the basis of information provided in this website or for any error or omission in the website; and
e) in cases where the user has any legal issues, the user must seek independent legal advice.