On with the show

The financial crisis has not brought the curtain down on India’s entertainment sector. Recent reforms have stimulated foreign investment. Opportunities beckon … Gowree Gokhale, Khushboo Baxi and Ranjana Adhikari report from Mumbai

India’s media and entertainment industry has experienced robust growth over the last five years and is one of the fastest growing sectors of the economy today. Analysts believe that although its growth may be affected by the economic slowdown, the sector will continue to enjoy substantial investment from cash-rich enterprises overseas. The entertainment industry, a blend of creativity and commerce, provides diverse investment opportunities in such areas as theatre and multiplex infrastructure, television, film, animation, print media, sport, mobile entertainment and advertising.

By liberalizing foreign direct investment (FDI) in the sector, the government has enhanced these opportunities, stimulating a flow of cash that is needed to keep India entertained through the downturn. Between 2005 and 2008, it opened the doors to foreign investment in several new sectors of the industry, and relaxed foreign ownership restrictions in others.

In June 2005, for example, the government scrapped its 50-year-old policy prohibiting the publication of foreign newspapers in India. In addition, it made changes that now permit up to 20% FDI in FM radio broadcasting.

Gowree Gokhale, Khushboo Baxi and Ranjana Adhikari are lawyers at Nishith Desai Associates, a Mumbai-based law firm with a significant media and entertainment practice.