The last decade has witnessed a lot of controversy around foreign telecasting companies (FTCs) telecasting their TV channels in India, from a tax and regulatory perspective. With the growing number of channels in India, the Government of India has felt the need, in the recent past, to regulate, among other things, the content being telecast by FTCs.

Now, The Information and Broadcasting Ministry today allowed 100 per cent Foreign Direct Investment in uplinking of television channels in the non-news category and 26 per cent for news channels.

The government on Tuesday released the notification for the revised guidelines of foreign direct investment (FDI) in uplinking of TV channels. The notification was issued on December 2, 2005. The new guidelines allow up to 26% in news and current affairs channels and 100% in channels of general interest. Earlier, up to 49% was permitted for setting up hardware and uplinking hubs.

For the news channels, the government has put the condition that portfolio investment in the form of FII and NRI deposits shall not be persons acting in concert with FDI investors as defined by Securities and Exchange Board of India.

FDI for uplinking a non-news and current affairs TV channel has been set at 100% and FDI (including investment by Foreign Institutional Investors (FIIs), up to 26% would be permitted in news channels, subject to the condition that the portfolio investment in the form of FII/NRI deposits should not be persons acting in concert with FDI investors, as defined in the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

For setting up-linking hub and teleports the government has allowed FDI of 49 per cent. The Ministry said that as in print media, even for TV news channels the limit should be capped at 26 percent. The TV news channels might be allowed to mobilise foreign investment through Investments by FIIs, Overseas Corporate Bodies, Persons of Indian Origin and Nonresident Indians.

Ministry had also recommended that ordinary news and non-news channels could be uplinked through KU band, channels are uplinking through the C-Band and only direct-to-home (DTH) operators use Ku-band.

The company permitted to uplink the channel, shall certify the compliance of this requirement through the company secretary at the end of each financial year.
While calculating foreign equity of the applicant company, the foreign holding component, if any, in the equity of the Indian shareholder companies of the applicant company will be duly reckoned on pro-rata basis, so as to arrive at the total foreign holding in the applicant company. However, the indirect FII equity in a company as on March 31 of the year would be taken for the purposes of pro-rata reckoning of foreign holdings.