26% FDI in Digital Media Boon Or Bane? KPMG India Head Explains

The government’s move to cap FDI in digital news media to 26% throws up questions that need clarifications.

KPMG India Head Vivek Gupta explains how 26% FDI in digital news media will impact the industry.

(Photo: Altered by The Quint)

Video Editor: Abhishek Sharma

The government's move to cap FDI in news and current affairs digital media to 26 percent throws up questions that need clarifications as some of those who were looking to raise funds could be restricted, according to industry players and experts.

The Union Cabinet on Wednesday, 28 August, approved permitting 26 percent FDI under government route for uploading/streaming of news and current affairs through digital media, on the lines of print media.

KPMG India’s head Vivek Gupta, talking to The Quint, explains how this will impact the news industry.

"For all the print news businesses there’s FDI cap of 26%, while for all television news businesses there’s an existing FDI cap of 49%,” he said.

“What the government has done yesterday (28 August) is that it has prescribed that digital news media business will have the same cap as that of print, i.e. from herein on all digital news businesses will be able to attract FDI up to 26%.”

The entire process of investing in the digital media businesses will have to happen with the government’s approval, he explains.

“So even if $1 investment has to come into a digital news media business that has to happen with government approval,” he added.

“One of the most interesting fallouts of this policy could be in terms of its impacts on aggregators. It’s interesting to see how digital news media is finally defined in the detailed guidelines that come from the government.”

Vivek Gupta, Head of KPMG India