16 October , 2019 Fdiindia
DPIIT Seeks I&B Ministry’s Views On Issues Raised By Stakeholders On New FDI Reform
Recently, in order to encourage more foreign investors to invest in the country, the government of India sanctioned several reforms in foreign direct investment norms across several sectors including digital media, single brand retail trade, contact manufacturing, and coal mining.
The government’s decision to permit 26 per cent foreign direct investment was met with uncertainty by stakeholders. The Department for Promotion of Industry and Internal Trade (DPIIT) asked the Information and Broadcasting Ministry for its views on the issues raised by certain stakeholders over the government’s decision to reform overseas direct investment norms.
Players in the industry have raised questions that need clarification as those who were looking to raise funds could now be restricted after the move to cap FDI in the sector to 26 per cent.
"Those issues which were raised on the decision, we have sent that to the Information and Broadcasting Ministry and they are looking into it for suitable clarification," the official said.
Jehil Thakkar, Delloitte India Partner said that clarity was required on how to treat cases of television broadcasters which stream news online, but are permitted 49 per cent FDI.
"What happens to those, whether they qualify under 26 per cent or 49 per cent (Foreign Direct Investment)? What happens to news websites which are 100 per cent foreign entity?" he had said.
Internet and Mobile Association of the country also asked for clarification on the recent reform.
In a representation to the Department for Promotion Industry and Internal trade, it said, "Several foreign strategic intermediaries have set up their operations in India, as digital media was categorized as 100 per cent FDI under the automatic route. A clarification on the non-applicability of the new FDI measure would be critical for them to continue making massive investments in India”.