Govt issues guidelines for publishing Indian edition of foreign news magazines

 The government today issued guidelines for publication of local editions of foreign magazines by Indian publishers in the news and current affairs arena. A decision to ease restrictions on inclusion of local content and advertisement was cleared by the Cabinet in September this year.

These guidelines are for the publication of Indian editions of foreign news magazines by Indian entities with or without any foreign investment, an official statement said.

Publishers of such editions will be eligible for 26 per cent foreign investment. Also, such magazines would be allowed to add local content and advertisements.

“The ceiling of total Foreign Direct Investment (FDI), which includes investments by non-resident Indians, Persons of Indian Origin (PIOs) and portfolio investments by recognised Foreign Institutional Investors (FIIs), is up to 26 per cent, according to the provisions of the FDI guidelines issued by the Ministry of Information and Broadcasting (I&B) from time to time,” the statement said.

This move is aimed at giving a boost to the magazine industry and the readers access to foreign news magazines at much lower prices.

Several Indian publishers have been looking at launching the local editions of foreign magazines for a long time.

Currently, the India Today group distributes the international edition of ‘Fortune’ magazine, while the Anand Bazar Patrika (ABP), the publisher of the ‘The Telegraph’ newspaper, is going to launch the Indian edition of Fortune magazine. Another international news magazine, ‘Forbes’, has already announced the Indian edition in a venture with the Network 18 group. “Several other foreign news magazines like ‘Newsweek’ and ‘Business Week’ have shown interest in the past to start a local edition. They will now be encouraged to launch these publications soon,” an industry source said.

The broad parameters for granting such permission say that the publisher or owner of the foreign magazine (of which the Indian edition is proposed to be published) should have sound credentials. Only those publishers who are registered as an Indian company with the Registrar of Companies under the provisions of the Indian Companies Act, 1956, will be eligible for the permission.

“The Indian companies would be allowed to enter into financial arrangements (such as royalty payment arrangements) with the owners of the foreign magazines subject to the rules and regulations. At least three-fourth of the directors on the Board of Directors of the applicant Indian company and all key executives and editorial staff should be resident Indians...,” the guidelines said.

It further said that the proposed publication should have been published continuously for a period of at least 5 years with a circulation of at least 10,000 paid copies in the last financial year in the country of its origin.

“The period of continuous publication and circulation must be certified by the respective Governmental authority of the country, and if there is no such Governmental authority regulating such matters, the certificate should be from respected and recognized agencies engaged in the business of certification,” it said.

According to the procedure for applying, 11 copies of the prescribed application form, duly filled in, along with the requisite documents will have to be submitted to the Ministry of Information and Broadcasting along with an application fee of Rs 20,000 that will have to be deposited through a demand draft. “All new applications for publication of Indian editions of foreign magazines dealing in news and current affairs sector, shall be processed and decided in the I&B ministry on the basis of inter-ministerial consultation with the other ministries like Home Affairs, External Affairs, Department of Industrial Policy and Promotion, and Ministry of Corporate Affairs as may be required,” the guidelines said. 

Govt looking to allow up to 49% FDI in FM radio

FDI limits in FM radio could soon be increased to 49 per cent for non-news channels and up to 26 per cent for news channels. News will also be allowed, according to Mr Anand Sharma, Minister of State, Information and Broadcasting.

“We are awaiting the comments from TRAI after which approval of the Cabinet shall be sought,” said Mr Sharma. “We are in the process of finalisation of Phase-III of this policy which shall expand FM radio services to 275 cities across the country. This policy will follow an even more liberal dispensation than before and would promote healthy competition to benefit the masses,” he added.

Special incentives are being considered for the expansion of FM radio coverage in the North Eastern states, Jammu and Kashmir and island territories. The Minister was briefing media at a conference in the Capital. Policy initiatives for Mobile TV and Headend in the Sky were also being worked on.

Pay TV homes are projected to increase from 74 million in 2007 to 115 million in 2012, and the Government reiterated its commitment to digitisation of television. Convergence of information, communication and entertainment (ICE), or the “ICE revolution”, was posing an unprecedented regulatory challenge for the Government said the Minister. The Government is also looking at reforms in the cable laws and the digitalisation of cable services.

Content quality

Of special concern, however, was the quality of content in electronic media.

“The Supreme Court has made serious observations on this issue and we feel that there is a strong and urgent need of content regulation of some kind. We are seized of this matter and are trying to find a solution which strikes a balance between freedom of creative expression and the need of content regulation,” said Mr Sharma.

Commenting on the opening up of print media with permission for Indian edition of foreign news magazines, Mr Sharma said that the Government “mindful of the sensitivities involved in the news segment” has not allowed local content to be added by foreign publications.

According to the Ministry, the entertainment and media industry witnessed a growth of 17 per cent in the last financial, the television industry is expected to grow annually at around 22 per cent and radio industry at 200 per cent over the next 5 years. 

FIIs direct India entry!!

The Securities and Exchange Board of India (Sebi) is working on a policy to allow certain categories of foreign investors to invest in Indian securities markets through the automatic route, without having to register themselves with the regulator, as is the current norm.

The proposed automatic approval will be subject to KYC (know-your customer) requirements being complied by brokers and custodians, through whom foreign investors carry out their transactions.

FIIs such as pension funds, endowment funds, university funds, insurance companies, banks and mutual funds are likely to be among the foreign institutional investors that may be allowed to invest directly in the Indian market, officials familiar with the development told ET.

They said the capital market regulator was deliberating whether to do away with the registration process for any entity. However, the view taken by RBI on this will be crucial in formulating the policy. In the past, the central bank had expressed reservations relating to KYC norms given the threat of money laundering and terror financing.

Currently, even though Sebi does the FII registration, it is the custodians of these investors who ensure that KYC norms are being complied with, and also maintain their own records of transactions.

Sebi has already started discussions with market intermediaries to understand how the FII registration process works in other emerging markets such as South Korea, Taiwan and Singapore. In some of the markets such as South Korea and Taiwan, foreign investors have to just fill an application form and can start trading within two days.

Financial sector regulators are also looking at the issue of distinction between foreign direct investment (FDI) and foreign institutional investment. Their view is that portfolio investment should not be considered for FDI limit since portfolio investors just have trading interests.

Another important move considered by policy makers is to allow any overseas entities, including NRIs (non-resident Indians) and OCBs to invest in the local stock markets, provided they identify themselves under the KYC norms.

“There should be no discrimination between non-resident Indians and other investors...since NRIS are already bringing in so much of foreign exchange remittances into the country,” an official associated with the exercise said.

Currently, NRIs are allowed to invest through different category or schemes such as the Portfolio Investment Schemes — they can pick up to 5% in one company. They can also invest through a broad-based fund, which has at least 20 investors with no investor holding more than 10%.

“Once the restrictions on NRIs are removed, it will enhance the inflow of investments in India substantially,” said a senior official with a law firm involved in the FII registration process.

Following the stock market scam of 2001, investment by NRIs has become more difficult, since overseas corporate bodies or OCBs were banned. The regulator is likely to put out the consultative policy paper for public comments shortly.

Meanwhile, the Sebi board, which will be meeting this week, is likely to discuss the future of regional stock exchanges.

In the recent past, Sebi had appointed a committee to study the future of regional stock exchanges — post-demutualisation under the leadership of G Anantharaman, former Sebi whole-time member. 

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