Digital media FDI rules to help government keep tabs on Chinese apps

Security clearance to CEO, foreign personnel aimed at monitoring sector, said experts

The foreign direct investment (FDI) rules announced on Friday will help the government monitor foreign companies, especially, Chinese firms, which have been investing in the country's digital media market, sector experts said.

News aggregator apps such as Dailyhunt and InShorts have nearly 80 per cent foreign ownership and do not adhere to the FDI norms for digital news media ownership, a recent letter from the Indian Newspaper Society (INS) to the government, said.

The Centre has made it mandatory for news aggregators as well as news agencies which supply information to digital media firms and companies uploading news and current affairs on websites, apps and other online platforms to comply with the 26 per cent foreign investment cap, it said on Friday.

Experts say that the security clearance to the chief executive officer (CEO) and foreign personnel of a digital media firm will put pressure on foreign companies to fall in line with local rules and regulations. "The aim is to provide a level playing field to domestic media companies," said Karan Taurani, vice president, research, Elara Capital.

INS's letter to the government had highlighted the same, saying that Chinese and foreign-owned news aggregators had spent nearly $200 million in promoting their apps in India over the last few years.

"Additionally, they accumulate Indian consumer data and attempt to monetise it and potentially share it with foreign partners,” the body said.

A recent report by consultancy firm KPMG shows that the adoption of digital news platforms has grown significantly during the Coronavirus (Covid-19) pandemic and lockdown, with unique visitors increasing nearly two times over the last 7 months. KPMG says that the growth in unique visitors will sustain even in the post-pandemic world, forcing domestic media players to step up operations in the area, as the shift to digital news accelerates.

A level-playing therefore is a must, argue some media experts. 

The government on Friday also announced that the Information and Broadcasting Ministry would consider extending certain benefits like issuing Press Information Bureau (PIB) cards to journalists from the digital media in the "near future", which are currently available to traditional media (print and TV) only.

PIB accreditation for its reporters, cameramen, videographers will enable them with "better first-hand information", the government said, while providing access including participation in official press conferences and such other interactions. The move is aimed at reducing fake news.

The government will also make digital media firms entitled to digital advertisements through the Bureau of Outreach and Communication, it added.