News agencies and aggregators which transmit, upload and disseminate news to digital media will have to comply with the 26% foreign direct investment cap. Department of promotion of Industry and Internal Trade (DPIIT)  stated that these companies would be required to make sure that their FDI is within the cap of 26% with the approval of the central government within one year from the date of issue of this notification or announcement. After the consultation, it has been clarified that the decision of permitting 26 % FDI through government route would apply to certain “category of Indian entities” which are registered or located in India. The categories are- news aggregators, applications and others which use software or web applications to aggregate news content from various source such as news blog, podcast, websites, video blogs and others in one location. The FDI cap would also be applicable to the news agencies which gather, write, distribute, and transmit news, directly or indirectly onto digital media and social media. News streaming services for current affairs, news websites and apps are also covered under the FDI cap announcement.

The FDI approval, the announcement underlined, would be done through the government route that is government approval on a case by case basis for News entities that are registered or located in India. Those companies that are already covered under this will have to bring their FDI within the limit of 26 % level, that too within a year from the notification. All digital media companies which are under the 26% FDI limit will have to ensure that the majority of members of board directors are Indian citizens. They also need to ensure that the CEO is an Indian citizen. If any foreign personnel are to be deployed by the digital news media entity, whether as a permanent employee or as a consultant, they will be required to obtain security clearance from the government. If the clearance is denied afterwards for whatsoever reason, then the services of the foreign personnel must be terminated.

The announcement does not make it clear as to what happens with the entities like Facebook and Twitter which are not registered in India and are owned by foreign entities. It also leaves room for an explanation as to what would happen with foreign news publication houses like the New York Times.

 The author is a student member of Amity Centre of Happiness.