Policy Framework-Media&Entertainment

FDI Policy
The government of India has put in place a liberal and transparent investment policy. FDI up to 100 per cent is allowed under the automatic route in most sectors/activities. FDI policy in India is reckoned to be among the most liberal in emerging economies.

The entertainment and media industry has also benefitted considerably from the initiatives taken by the government over the years. The FDI limits in the various segments of the entertainment and media industry are highlighted below:
Film Industry
Under automatic route upto 100 per cent FDI is permitted in film industry (i.e. film financing, production, distribution, exhibition, marketing and associated activities relating to film industry) subject to the following:

• Companies with an established track record in films, TV, music, finance, and insurance would be permitted
• The company should have a minimum paid up capital of US$ 10 million if it is the single largest equity shareholder and at least US$ 5 million in other cases
• Minimum level of foreign equity investment would be US$ 2.5 million for the single largest equity shareholder and US$ 1 million in other cases
• Debt equity ratio of not more than 1:1, i.e., domestic borrowings shall not exceed equity.

Radio Industry

Upto 20 per cent FDI is allowed in Radio Industry subject to an approval from Foreign Investment Promotion Board (FIPB) in addition to the guidelines notified by Ministry of Information and Broadcasting.

Print Media

In case of news category, foreign investment up to 26 per cent is allowed in Indian entities publishing newspapers and periodicals dealing with news and current affairs, subject to certain preconditions. The foreign investment cap under non-news category has been enhanced from 74 per cent to 100 per cent in case of Indian entities publishing scientific/ technical /specialty magazines/ periodicals/journals.

Other Policies

• Broadcasting Bill
• Foreign Investment Policy
• Advertisement Policy

Media Industry-Road Ahead

According to a report by Crisil, Media and Entertainment industry is poised to double its revenues by 2010 with an annual growth rate of 15.6 percent. The study forecasts that the revenues will reach up to the level of INR 74,400 crore by 2010 from INR 36,100 crore in 2005. The sector is riding high on the back of several factors such as presence of multiple players, greater choices to consumers and growing investor interest. According to another report by FICCI and PricewaterhouseCoopers, the media and entertainment sector is expected to cross turnover of INR 100,000 crore by 2011 from the present INR 43,700 crore, thereby registering 18 per cent compounded annual growth.

Useful Web links

• Ministry of Information and Broadcasting

Source:FICCI,Minstry of External affairs web site,

Government Initiatives
The Union Cabinet has cleared the community radio policy 
The Government allows 20 per cent FDI in FM radio and recommended shifting to revenue sharing regime from the current licence fee structure.
Presently 26 per cent foreign equity holding in news-related print media is allowed, though editorial management must remain Indian.
Union Cabinet has relaxed the 26 per cent FDI cap in news channels by allowing investments by FIIs, NRIs and overseas corporate bodies (OCBs) within the 26 per cent FDI ceiling.
Sources:Nespapers,Websites