Govt mulls over Trai proposal to hike FDI cap in news channels

The government is mulling over broadcasting regulator Trai's proposal to increase foreign direct investment limit in FM radio, news channels and other sectors under this segment.     

Official sources said the Information and Broadcasting Ministry is "favourably disposed" to the idea of hiking the FDI level in FM radio, TV, community radio, cable and DTH.     

Though the Department of Industrial Policy and Promotion (DIPP) is taking a holistic view of FDI for all segments, the I&B Ministry is taking a look at the "level and interpretation" of FDI in the broadcasting sector.     

TRAI had earlier recommended increasing FDI limit in this sector and the ministry is studying the extent to which it could be raised in FM radio, TV, community radio, cable and DTH.     

It would depend on whether the FDI would include indirect component as well in the composite nature of FDI. DIPP is currently looking into this.     

The ministry is also of the view that FDI in news and current affairs channels and FM radio could be increased by a small amount, considering the sensitivity of the sector.     

Trai has recommended raising the foreign investment limit in news channels and FM radio to 49 per cent from 26 per cent.    

Sources said there would be some increase in FDI limit here but the extent would be decided by what comes out of the definition of FDI.     

If it is defined as a combination of both direct and indirect, then 49 per cent FDI in news channels may not be allowed as investors tend to circumvent the limit through indirect FDI which include FII and NRI investment.