Raising the FDI in print from 26 per cent to 49 per cent has been a hotly debated topic, and when exchange4media got together seven top media honchos for a special Roundtable in the Capital on July 11, several important points came to the fore. The Roundtable was sponsored by 4Cplus, a company engaged in bringing out e-magazines and hosting websites.
At the end of the Roundtable, an overwhelming majority of media owners and CEOs were in favour of raising the FDI limit.
The seven panelists were Sanjay Gupta, CEO, Jagran Prakashan; Ashish Bagga, Group CEO, India Today Group; Hormusji N Cama, Director, Bombay Samachar; Maheshwer Peri, President, Outlook Group; Paresh Nath, Editor & President of Delhi Press; Rajiv Verma, CEO, HT Media Ltd; and Sachidanand Murthy, Resident Editor, The Week, & Secretary General of the Editors Guild of India.
The Roundtable began with the moderator Kalyan Kar, Editor, exchange4media, asking Paresh Nath to clarify the confusion over a purported note supposedly circulated by the I&B Ministry among Cabinet Ministers, seeking to raise the FDI cap to 49 per cent.
Nath clarified, “The Cabinet note does not talk about increase in FDI, it talks about permission to be granted to publications to be brought in by the companies, where the stake is only 26 per cent. The impression that FDI should be increased to 49 per cent is wrong. The note intends only to give permission to foreign titles to come into India, to get local coverage and get local advertising and print at whatever price. The FDI cap continues to be 26 per cent.”
Sachidanand Murthy said here, “We spoke to the Joint Secretary in-charge of the subject and she confirmed that it would be only allowing foreign news and business magazines to come in, and arrange for only foreign newspapers to come in with Indian editions, having Indian content and advertising. They should be 100 per cent foreign-owned magazines with Indian editions.”
Kar asked the panelists, “How would pushing the FDI cap to 49 per cent enhance the strength of the Indian partner?”
Ashish Bagga said, “News and business are interrelated. The key question is should the FDI limit go up to 49 per cent or not. But I ask, why was 26 per cent allowed in the first place? I feel the economy has progressed in the last five years and media, too, has progressed to a large extent. Time has come to push for further liberalisation. If you look at it from a market stand point, a foreign publisher will only add to what we are doing. I believe, we ought to raise the FDI cap from 26 per cent to 49 per cent now, and then maybe a couple of years later do a ‘Roundtable’ for further increase.”
Maheshwer Peri noted, “There are so many loopholes and permissions to be taken from the VCs that you can still control the business with even as less as 5 per cent. The percentage of equity is personal again. I have a stake in business and let me build some foreign titles, and build something that India hasn’t seen before.”
Rajiv Verma pointed out here, “HT was among the first media companies to bring in foreign equity. Increase in FDI is going to open the doors for smaller publications, which will in turn move the centre of gravity in media. There is a need to open up the industry and making it globalised.”
Sanjay Gupta added, “My father was instrumental in bringing FDI to India. I am also for hiking the FDI limit to 49 per cent, but critical part is how do I separate foreign institutional investors (FIIs) from FDI? Both are being treated at par and that’s a hurdle. Even if the FDI limit goes up to 49 per cent, how do I make the FIIs different? Once the stock is in public, it should not be differentiated, but at this moment it is being differentiated. Companies having a large share of equity in Indian companies would want to control content in some way or the other.”
Kar then posed the question, “Is 49 per cent FDI a danger to the editor?”
According to Murthy, “Newspapers have an enormous social role to play, and the editor has a crucial role to play in it as newspapers influence decisions. Even when there was 0 per cent FDI, investment was still coming in. I don’t think there is need to increase FDI beyond the 49 per cent limit as then there would be no control. From an editorial perspective, the magazine should be Indian, the editor should be Indian and the publisher, too, should be Indian.”
Nath was very clear when he said, “There is no need for any foreign equity in media, which is very secular for a country. Just like the Legislature cannot be put in foreign hands, we cannot give editorial control to foreign hands either. We shouldn’t forget that FDI is prevalent in Europe and US because there is one culture that is divided into many nationalities. We as a country are still bound by religious and cultural issues. No foreign equity holder will try to pick issues like what you are doing in Babri Masjid is wrong. The foreign investor will only be concerned with the returns.”
“Money is not a problem in India. Any publication with a sound base and a sound policy can bring in local money easily. Indian businessmen have been investing in Indian media. We have modernised print before the advent of FDI. It is surprising that foreign equity is only coming to publications that are well equipped,” Nath noted.
In contrast, Hormusji N Cama said, “I don’t understand why some guys are against FDI. We are highly intelligent and we know how to run our businesses and we will keep foreign pressures away. No editorial policy has been changed till now. We are intelligent enough to use them for our purposes and businesses.”
Peri added, “Media should be treated as corporate, that’s how it is treated in other countries.”
Agreeing with him, Gupta said, “Media shouldn’t be treated differently from FMCG companies, if you treat it different, you wouldn’t be at par with the international media scene.”