The advertising fraternity has welcomed the recommendations of the NK Singh committee report, which has suggested that foreign direct investment in the industry should go up to 100 per cent from the existing 74 per cent.
Agencies felt that allowing 100 per cent FDI would help in the reduction of operational complications. However, they also said the removal of the cap would not make much of a difference because the industry was not capital-intensive and needed no major investment.
According to industry analysts the move will open doors for new and international clients for Indian advertising agencies. The local advertising agencies would co-exit with their foreign counterparts even if the cap was removed because the industry was driven by human skills.
The industry honchos said most of the foreign bigwigs were already there in the Indian market and therefore, even if the government decided to accept the NK Singh Committee recommendations, there would not be any major change in the present scenario. According to some allowing 100 per cent FDI in advertising would open the channel of employee stock options, which was not available at present.