India to Loosen Restrictions on FDI into Broadcasting Services

The Government of India is planning to propose a hike in the maximum foreign direct investment (FDI) capital allowed in broadcasting services – such as direct-to-home (DTH) and cable TV – to a uniform portion of 74 percent.

The Finance Ministry has given its consent to a draft cabinet note which outlines the changes circulated by the Industry Ministry. In addition to DTH and cable TV, the initiative also aims to set FDI capital limit at 74 percent for mobile TV, an area of future growth.

The Department of Industrial Policy and Promotion (DIPP) in the Industry Ministry had previously suggested that the same FDI cap be extend to other broadcast carriage services, including head-end in the sky (HITS). HITS is a satellite multiplex service that provides cable channels for cable television operations.

At present 49 percent FDI is allowable in DTH and cable TV, while the limit for HITS is 74 percent. For TV news channels, FM radios and content providers, the FDI maximum will remain at 26 percent.

According to the ministry, uniformity has been proposed in order to take into account the convergence of technologies in the broadcasting and telecom sectors.

The Telecom Regulatory Authority of India (TRAI) had also previously suggested that FDI allowance for broadcast carriage services be made uniform in June 2010. There are approximately 106 million households with TV in India, of which about 26 million use DTH and 80 million use cable TV.

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