The Union cabinet has decided to allow the foreign news and current affairs magazines to publish local editions, lowering a significant hurdle to the entry of the foreign media into the country.
Although the cabinet kept the 26 per cent cap on foreign direct investment into news and print ventures, the relaxation means that news magazines, such as Time, Newsweek, The Economist or BusinessWeek, can now strike deals with Indian publishers to roll out cheaper Indian editions with up to 100 per cent foreign content, and to sell advertising space in India.
The new policy, however, retains significant curbs on content and advertising on foreign newspaper ventures in India, discriminating in favour of television news. And now, news magazines have got an edge over newspapers. The government claimed that the decision aimed at letting the Indian reader “access foreign magazines at cheaper rates”.
Information and Broadcasting Minister Priya Ranjan Das Munsi claimed, “The Indian reader would be benefited immensely as he/she would be able to keep abreast with the latest events and happenings on the global scale.” But newspapers are still restricted to using not more than 20 per cent foreign content.
However, the decision will immediately benefit the Anand Bazaar Patrika Group, which has joined hands with Time Inc. for an Indian edition of Fortune magazine, and Television Eighteen India Ltd (TV18), which said it was teaming up with Forbes Media, the publishers of Forbes magazine, to publish a business magazine later this year.
“We welcome the decision, but I can't comment any further before reading the fine print of the policy,” said Haresh Chawla, group CEO, Network18 Media and Investments Ltd. ABP chairman Aveek Sarkar declined to comment, while Aroon Purie, chairman, Living Media India Ltd, said, “The government should extend this to newspapers, too. The India Today group will now move to bring relevant news titles to the Indian reader.”
Many foreign editions of news magazines are sold in India, through distribution and marketing arrangements with local publishers. For instance, Living Media markets and distributes Time, while Outlook Publishing India Pvt. Ltd markets and distributes Newsweek and distributes BusinessWeek.
According to Ashish Bagga, CEO, Living Media, some 30,000 copies of Time are sold in India. , while Outlook president Maheshwar Perisaid said NewsWeek sells 35,000 copies in India. He said the next step should be to raise the FDI limit to 49 per cent.
A 2008 report by industry lobby Ficci and consultants PricewaterhouseCoopers estimated India's print media to be a Rs 14,900-crore industry in terms of revenues. Newspapers accounted for 87 per cent, while magazines generated Rs 1,900 crore. The report projected that magazines will see a compounded annual growth rate of 15 per cent during 2008-2012 to become a Rs 3,800-crore business.
Under the new rules, the title still has to be registered with the Registrar of Newspapers for India and all key executives and editorial staff must be resident Indians.