Foreign direct investment (FDI) policies in the media and entertainment sector have pursued a balance between economic growth, cultural preservation and national security. Before liberalisation in the 1990s, FDI was restricted. The focus was on domestic industries and safeguarding the nation’s culture.
In 1991 India began opening to foreign investment. However, the media and entertainment sector still faced many FDI restrictions protecting national identity and restricting foreign influence.
In 2000, major FDI changes in the sector allowed 26% FDI in print media, but capped news broadcasting FDI at 20% and 49% for non-news outlets. 2006 saw FDI in news channels increase to 26%, matching print media. Non-news channels, including entertainment and sports programming, saw FDI raised to 100%. The push for digital broadcasting led to a relaxation of FDI restrictions on cable and direct-to-home (DTH) services to 74%, with 49% under the automatic route. In 2016, the media and entertainment sector was significantly reformed, with many FDI limits lifted, allowing 100% FDI through the automatic route. This is aimed at boosting investment and advances in technology.
Acknowledging the growth of digital media, the government in 2019 permitted up to 26% FDI with its approval for online uploading and streaming of news and current affairs. In 2021, automatic route FDI for the telecommunications sector, including mobile TV and streaming services, increased from 49% to 100%, as part of broader efforts to attract foreign investment in critical infrastructure.
FDI policies have gone from strict control to gradual liberalisation, recognising the sector’s potential for growth and changing media consumption. However, economic interests have been balanced by cultural and security concerns.
The industry is experiencing continuous expansion, supported by measures such as the digitisation of cable distribution, increased FDI limits for cable and DTH satellite platforms, and industry status for the film sector. The Film Facilitation Office has streamlined the grant of filming permissions. The government is encouraging the animation, visual effects, gaming, and comic industries. FDI policy for media and telecommunications, however, still follows a structured approach, with varying FDI limits and entry routes.
In the broadcasting sector, including teleports, DTH, Headend-in-the-Sky, cable networks and mobile TV, foreign investors can inject up to 100% FDI automatically. They no longer need government approval, simplifying market entry. However, FDI in FM radio and TV news and current affairs channels is capped at 49%, requiring government approval and adherence to regulations.
Streaming news and current affairs through digital media has an FDI limit of 26%, with government approval. Newspapers and periodicals publishing news and current affairs also have a 26% cap with government oversight. Scientific and technical magazines, specialty journals and periodicals see 100% FDI, but require government approval. This also applies to the facsimile publication of foreign newspapers.
In telecommunications, up to 49% FDI is allowed automatically, with greater investment requiring government approval. This sector covers services and technologies critical to India’s connectivity and communication infrastructure. The film and advertising industry allows 100% FDI automatically, simplifying entry.
Government efforts have resulted in record inflows, with India ranked eighth for FDI appeal. Media and entertainment’s promising future is driven by increasing penetration, personal consumption, digitisation, targeted marketing, regional diversification and the growth of the animation industry. The convergence of entertainment, information and telecommunications opens opportunities for content creators and distributors. FDI evolution in the sector shows adaptability and a welcoming of global investment.
The industry is thriving, promising growth and innovation. Official policies and a business-friendly environment have positioned India as a desirable international investment destination. The sector’s expanding digital horizons underline its pivotal role in shaping India’s culture and economic growth.
Rohit Jain is managing partner and Nitish Mawkin is a principal associate at Singhania & Co.
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