MxMIndia

Tag: FDI

  • Digital media firms with more than 26% FDI must bring it down to toe the line by Oct 15, 2021

    By A Correspondent

     

    On Monday, November 16, the Union Ministry of Information and Broadcasting issued a public notice to facilitate eligible entities involved in uploading/streaming of news and current affairs through digital media, to comply with the decision of Union Government on September 18, 2019, which had permitted 26% FDI under the government approval route.

     

    In a public notice, available on its website, the ministry has today laid out the detailed actions to be undertaken by eligible entities to comply with this decision, within a month. Under the notice,

     

    (i) Entities having foreign investment below 26% may furnish an intimation to the Ministry of Information & Broadcasting within one month from yesterday (December 15, 2020) giving the following:-

    (a) Details of the company / entity and its shareholding pattern along with the names and addresses of its Directors / shareholders,

    (b) The names and address of Promoters/Significant Beneficial Owners,

    (c) A confirmation with regard to compliance with pricing, documentation and reporting requirements under the FDI Policy, Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and Foreign Exchange Management (Mode of Payment and Reporting of Non-debt Instruments) Regulations, 2019 along with copies of relevant reporting forms in support of the past/existing foreign investment and downstream investment(s), if any, and

    (d) Permanent Account Number and the latest audited / unaudited Profit & Loss Statement and Balance Sheet along with the Auditor report.

     

    (ii) Entities which, at present, have an equity structure with foreign investment exceeding 26% would give similar details as at (i) above to the Ministry of Information & Broadcasting within one month from yesterday (December 15), and to take necessary steps for bringing down the foreign investment to 26% by 15th October, 2021 and seek approval of the Ministry of Information & Broadcasting.

     

    (iii) Any entity which intends to bring fresh foreign investment in the country has to seek prior approval of the Central Government, through the Foreign Investment Facilitation Portal of DPIIT, as per the requirements of (a) FDI Policy of Government of India and DPIIT Press Note No. 4 of 2019 (dated 18.9.2019) in this regard and (b) Foreign Exchange Management (Non-debt Instruments)(Amendment) Rules, 2019 vide Notification dated 5.12.2019.

     

    NOTE: – Investment means to subscribe, acquire, hold or transfer any security or unit issued by a person resident in India.

     

    (iv) Every entity has to comply with the requirements of citizenship of Board of Directors and of the Chief Executive Officers (by whatever name called). The entities are required to obtain security clearance for all foreign personnel likely to be deployed for more than 60 days in a year by way of appointment, contract or consultancy or any other capacity for functioning of the entity, prior to their deployment. For this purpose, the entities will apply to Ministry of Information & Broadcasting at least 60 days in advance and the proposed foreign personnel shall be deployed by the entity only after prior approval of this Ministry.

     

    The Public Notice can be accessed at:

    https://mib.gov.in/sites/default/files/Public%20Notice%20%20regarding%20FDI%20Policy%20.pdf

  • This is a welcome move and should lead to larger FDI inflows in India in the already burgeoning digital media sector, said Himanshu Parekh, Partner and Head, International Tax, KPMG in India

    FDI in digital media could mean large fund inflows: KPMG

    By A Correspondent

     

    The Union Cabinet announced its policy for Foreign Direct Investment (FDI) in the digital media. Here’s goes the relevant part from a communique, titled ‘Digital Media’: The extant FDI policy provides for 49% FDI under approval route in Uplinking of ‘News & Current Affairs’ TV Channels. It has been decided to permit 26% FDI under government route for uploading/ streaming of News & Current Affairs through Digital Media, on the lines of print media.

     

    Said Himanshu Parekh, Partner and Head, International Tax, KPMG in India on changes to FDI norms in digital media: “The M&E industry grew by 13.3% in FY19 (as compared to FY 18) on the back of colossal growth of 43.4% in digital media segment*. This is despite the fact that while the FDI policy currently permits 49% foreign investment in Uplinking of News & Current Affairs TV Channels and 26% in print media sector, both through government approval route, it was silent on FDI in the digital media segment. The government has today approved the proposal to allow 26% FDI for uploading/ streaming of News & Current Affairs through digital media. This is a welcome move and should lead to larger FDI inflows in India in the already burgeoning digital media sector.”

     

     

  • The information and broadcasting ministry has asked the TRAI and Press Council of India to rush their comments on the increase of foreign invements limits in the broadcast and print media sectors respectively.

    Jaldi karo! MIB asks TRAI & Press Council to expedite comments on foreign investment limits

    By  A Correspondent

     

    The Ministry of Information and Broadcasting has requested TRAI once again to expedite its comments on the reference made earlier to the body regarding foreign investment limits in the Broadcasting Sector. In its communication to TRAI, the ministry has sought comments regarding the paper prepared by the Ministry of Finance relating to revision in existing FDI caps in the broadcasting sector. The paper had been forwarded to TRAI seeking its recommendations under Section 11(1)(a)(ii) & (iv) of the TRAI Act, 1997, which pertains to the terms and conditions of license to a service provider and measures to facilitate competition and promote efficiency in the operation of telecommunication services to facilitate growth in such services.

     

    In a similar separate communication, the ministry has requested the Press Council of India to expedite its advice on the existing sectoral caps of FDI in the print media, under Section 13 of PCI Act, 1978. The advice has been sought in view of the communication received from the Ministry of Finance which aims to review policy of sectoral caps of FDI in the print media. Section 13 authorizes PCI to express its opinion in regard to any matter referred to it by the central government.

     

    The paper proposes to raise the existing FDI cap of 26% which is through FIPB route to 49% through automatic route in the news sector. In the non-news sector, the existing FDI cap is 100% through FIPB route which has been proposed to be 100% through automatic route without the requirement of FIPB’s approval.

     

  • It is building a crack team in Bangalore as shopping goes online and supply-chain efficiencies become more critical in keeping prices affordable

    Tesco expects Bengaluru to up competitive edge

    By N Shivapriya & Harsimran Julka

     

    The proposal to permit FDI in multi-brand retail may have come a cropper but as technology becomes the next big battleground for retailers, India may well be where these battles are fought.

     

    Tesco, the world’s third-largest retailer, is building a crack team in Bangalore as shopping goes online and supply-chain efficiencies become more critical in keeping prices affordable.

     

    From scheduling transportation in Thailand to floor planning for its stores in UK, there’s a bit of Bangalore in everything Tesco does, and its Chief Information Officer (CIO), Mike McNamara, only sees that growing in the days to come. “Digital and technology will be big battlegrounds within each of the markets,” McNamara told ET in an exclusive interview, and he sees the Bangalore office playing a central role in giving it that competitive edge.

     

    The centre started in 2004 and Tesco was one of the first retailers to set up a captive unit here. The world’s largest retailer, Walmart, also followed setting up Walmart Labs in Bangalore but only a few years ago. Both of them, as well as other global retailers, use Indian service providers for parts of their IT and analytics.

     

    Mr McNamara himself is averse to calling Tesco’s centre a captive because he finds it subservient. “We’ve watched it blossom from a fairly solid operations centre into something that’s doing this very sophisticated work,” he said.

     

    The centre employs over 6,000 people, who work on functions as varied as online advertising, mobile applications, store design and transport scheduling, in addition to IT and back-office functions.

     

    A team of mathematicians in Bangalore and UK work on algorithms for sophisticated supply chain systems that take into account everything from weather patterns to sporting events and seasonal variations. “If we don’t get the mathematics exactly right for the fresh foods, it goes waste. Getting it right is a tricky business – it’s a huge leverage on profitability,” said Mr McNamara.

     

    Mr McNamara, who is on Tesco’s executive committee, wants to centralise all the skills Tesco has learnt from its 100 years of retailing experience in UK at its facility in India and run the supply chain for its Asian markets from here. These markets are relatively newer for Tesco but they are already key markets from a revenue point. Korea, where it is the second-largest retailer, is also its second-largest market after UK.

     

    In US, where its business is struggling, the Bangalore office helped to launch a loyalty scheme, which is entirely digital. Most of the IT for US is done entirely from Bangalore. “The US team is very small,” said Mr McNamara. Overall, 70 per cent of the IT across the Tesco Group is from India and that’s likely to increase rather than decrease, he added.

     

    The centre currently services every single country in the Tesco Group, including new businesses such as banking, where it has built new systems and completed a massive programme to migrate over 2 million credit card customers. Over time, he expects the banking business, which is relatively younger, will do more work out of India.

     

    As CIO for Tesco, most of Mr McNamara’s time is now spent in marketing and commercial functions as compared to five years ago when it was mostly operations and productivity. “It’s not so much a digital strategy any more but a retailing strategy that is becoming digital. And that’s a very important distinction,” he says, “It’s not just about applications selling things on the internet but about helping people buy things in shops as well.”

     

    While many global companies are looking to cut down on IT spending, retailers such as Tesco are increasing it. “It’s a good time to be an IT guy in retail. In other industries, IT budgets are under more pressure. In retail, because we need to meet the consumer need for mobile apps, for social views, for all of these things, spending is on the rise.”

     

    Tesco has switched investments from property to technology, says Mr McNamara.

     

    “We would typically invest in the billions in property. You don’t have to shift too much of that into technology to make a difference. We have increased our technology spends quite significantly. And much of that increase is going into customer facing technology,” he added.

     

    Tesco is also unique because it is one of the companies, which has a former CIO, Philip Clarke, as its CEO. Mr McNamara describes Mr Clarke as a retailer by background who’s a technophile and himself as technologist who loves retail. “He (Clarke) has a very deep understanding of what technology can do for business. It’s a huge positive when there’s somebody else in the executive team who speaks the same language as you.”

     

    In retail, the tough part is to get economies of scale in operations, says Mr McNamara. “You can get them in buying, no doubt. But to leverage your operational skill across countries, that is difficult. Just because you manage supply chain well in UK, doesn’t mean you can do the same China,” he said.

     

    And this what Mr McNamara is trying to do through Tesco’s India centre – put the skills in one place where it can service Europe and China and leverage the operational skill across the entire group, rather than teach it in every country. The battle lines are being drawn.

     

    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • The multiple financial scams under the UPA-2 rule have not just tarnished the nation’s image, they have made India a highly suspect destination for business

    Anil Thakraney: An open letter to the PM

    By Anil Thakraney

     

    Dear MMS,

     

    You complain that India Inc’s negative comments are disappointing. You are apparently displeased about what the suits have to say about your government. That the UPA’s policies are quite depressing for business in India.

     

    Well, Sirji, the industry leaders have every reason to feel disheartened and negative about theIndiastory. If at all, I would say they are being pretty mild and cautious in their observations, because they can’t afford to upset the assorted politicians and bureaucrats in your team. Backlash from an upset government can be rather hurtful.

     

    Before you sulk over their comments, let’s examine your own track record since UPA-2 came to power: In the last one year alone, fuel prices have spiralled out of control, sending the economy for a toss and making the inflation figures go through the roof.

     

    As if that was not bad enough, the rupee is getting weaker by the day, and has now hit an all-time low. What is particularly pathetic, is that all this is happening under the leadership of a man touted as a master economist.

     

    I am not going to discuss the crashing infrastructure in the metros (many firang suits are known to take a sharp U-turn the moment they emerge from the Mumbai airport) because it’s too damn depressing. But I must point out that the multiple financial scams under your rule have not just tarnished the nation’s image, they have made India a highly suspect destination for business.

     

    In fact, the Anna Hazare campaign has made India look like a global clown on the world stage. And by the way, your complete mishandling of the Anna team hasn’t helped matters at all.

     

    And oh, just what happened with the FDI in multi-brand retail idea? You did not have the skills and means to push it through. At the very first sign of protest from the opposition leaders you ducked for cover. How encouraging is that for India Inc? It doesn’t end here. Your various ministers are often at war with each other, and as a leader you seem to have no control over their bickering.

     

    Sir, it’s a long list of gripes, and frankly I don’t want to put out the laundry list and destroy the New Year festive mood. But let me just say this: Instead of feeling bad, you should be thrilled that despite your government’s abysmal performance and dubious policies, many business leaders continue to be bullish on India.

     

    Thank them rather than complain. Happy New Year!

     

    * * *

     

    PS: Fantastic presentation at the BAFTA by acclaimed screenplay writer Charlie Kaufman. Totally from the heart, and an eye-opener. A must watch not just for those in the movie business but for all creative people.

     

    Link: http://video.bafta.org/services/player/bcpid1089742060001?bckey=AQ~~,AAAABxWZS7k~,uLPjGIDNpTm4SaHbu0n1-QlyJhJ3l3ls&bctid=1314090439001

  • The 'on-hold' status of FDI in multi-brand retail sends the message that India is a country of uncertain climate and even shakier governance.

    Hard Knocks: Crossed signals over FDI

    By Anil Thakraney

     

    I often wonder why international corporates even want to invest in a messy country like India. Why do they wish to take on all the headaches of operating inside such a chaotic nation. The answer, I suppose, is the market saturation in their own lands, and a raging desire to capitalize on the booming spending populace of this third world nation. Which makes the suits risk an entry into this snake pit.

     

    Well, all I can say is that these companies are either gutsy or desperate or both. If I was an international investor, I would quietly park my money in China. Or even Vietnam and Indonesia. And fly over India. Look at all the tamasha that just happened over the issue of FDI in multi-brand retail. And now it’s been put on ‘hold’… an euphemistic way of saying that the government chickened out of the deal. Here are the three messages we just sent to the global businessmen:

     

    1> The Indian PM is lamer than a lame duck. He has the vision, but lacks the ability, wherewithal and support to push new projects through. That, not just his rivals and allies, even his own party men can upset his plans at any time.

    2> Even if the FDI in retail bill gets passed, which is now a very remote possibility (even Baba Ram Dev doesn’t like it!), it’s left to the various states to accept or reject it. So you could be present in Delhi and Mumbai but missing in Bangalore, Kolkata and Chennai. And when the state government changes, there’s no surety the new government won’t kick you out of the city. So there’s never any hope of stability.

    3> Goons of various political parties are always ready for some action on the streets. So to pacify a particular vote bank segment, there’s always a chance that they will strike your super expensive store. Shattered glass panes, damaged wares and bruised business could be just a stone’s throw away.

     

    Yes, India is a hot destination for dhandha. But only for the steely, hardy, brave risk-takers.

     

    ***

     

    PS: Quite liked the rich tributes various TV channels paid to Devsaab immediately on the news of his death. The best package was put out by Times Now (pretty much non-stop coverage) and Aaj Tak (the only channel that told us some untold Dev Anand tales). The only disappointment came from NDTV. On a day like that, when the whole nation was humming Dev’s classics, they ran an hour-long, maha-boring prime time show on parliament adjournments. From the sublime to the ridiculous.

  • India is a vast, complicated, multi-layered nation. There is room for every kind of business out here. Co-existence is indeed the soul of this nation.

    Hard Knocks: The retail FDI tamasha

    By Anil Thakraney

     

    Total bullshit is going on over the subject of FDI in the multi-brand retail market. India is a vast, complicated, multi-layered nation. There are all sorts of market segments out here, based on all sorts of classifications… social, economic, regional, etc… each with its own needs and behavioural patterns. There is room for every kind of business out here. Co-existence is indeed the soul of this nation.

     

    Take a drive down Bandra in Mumbai. At a traffic signal, affectionately parked next to each other, you will notice a Benz, a Nano, a Luna and a bicycle. Ditto in a Punjab village. A loaded farmer would flaunt his latest Rolex. While one of his minders is eyeing that brand new 20 inch colour TV. Similarly, there is a market for Tesco. And a market for Nilgiris super market. And a market for the guy who runs the local kirana shop. Because there are various market segments they cater to. And even within each segment, a consumer would have different needs at different times. A housewife will want to indulge in a super store. But back home in the evening she will call her kirana guy for six eggs and pickle.

     

    And if at all there is increased competition, isn’t that a good thing for the consumers? Retailers will have to improve their offerings and service. The grocer in my building complex is a smart chappie, he’s already seen the future. Not only does he promptly send me maida and bread, he also helps with paying my electricity bill and offers to get appliances repaired, for a small fee.

     

    So basically, the whole tamasha is about the opposition parties trying to show the Congress-led UPA in a poor light. By scuttling their ideas. And the only thing they’ve managed to achieve is to get the anti-corruption bill off the agenda, as the parliament fights over retail chains.

     

    Who would have thought Walmart could trump Anna Hazare. Happens only in India.

     

    ***

     

    PS: Quite liked this ad from Chrysler. Talking tough, talking steel, talking business. Detroit’s fighting back, and how! Also, aggro, spirited singer Eminem is the perfect guy to represent them. Good one.

  • The foreign investment limit for FM radio has been enhanced to 26% from the earlier 20%. This change ensures conformity of the foreign investment limit in this sector with other similar activities in the Information & Broadcasting sector. Are the players satisfied with the increase?

    FDI’s 26% allowance: Are radio players happy?

    By Shubhangi Mehta

     

    The government has enhanced the foreign investment limit for FM radio to 26 percent from the earlier 20 percent.

     

    This change ensures conformity of the foreign investment limit with other similar activities in the Information and Broadcasting sector.

     

    Rana Barua

    Is the increase adequate or was there more that was expected?

    Mr Rana Barua, Chief Operating Officer at RED 93.5FM, put forth his views by stating,” it’s a positive sign for sure for the industry .

    Whether Red Fm is looking at upping the Astro stake, Mr Barua said, “We will try and look at that but this will all depend on internal decisions hence there is not much to be said on this as of now”.

     

     

     

     

     

     

     

    “It is a welcome change but we will be able to gauge its real value closer to the bidding date of phase3 when migration policy is clear.  While radio in india is possibly one of the highest CAGR media in the world, the global economic situation needs to be accounted for in order to ascertain foreign investment’ interest,” said Mr Vineet Singh Hukmani, MD, Radio One.

     

    Apurva Purohit

     

     

    On this Ms Apurva Purohit, CEO, Radio City 91.1 FM said,”The increase in FDI in Radio sector from 20 to 26 percent is not really going to make any dramatic impact on the industry. It is too less and even now not on par with other media like TV or DTH.”

     

     

     

     

     

     

     

     

     

    Prashant Panday

     

    Mr Prashant Panday,CEO,Radio

    Mirchi, remarked, “A higher FDI limit will help FIIs to trade more in radio stocks that are listed. Till now, the limit was 20 percent and when FIIs approached that number, they had to take special permission from RBI to buy more. Now that limit has been raised to 26 percent and that will help increase volumes on listed radio stocks.”

     

     

     

     

     

     

     

    Will this encourage more foreign players to invest in the market?

    On this Mr Panday said,” Whether it will have any impact on strategic investments from foreign companies in India or not remains to be seen. On the one hand, the radio sector in India offers tremendous growth opportunities. But on the other hand, the sector’s profitability has been in question for much of the last five years. Even going forward, if bidding in Phase-3 becomes unreasonable, profitability could be in serious jeopardy. Further, foreign ncompanies are themselves operating under uncertain conditions in their own markets. Whether they will be willing to invest in India at this point in time remains to be seen.Also, given the condition of the money markets in India right now, it is unlikely that fund raising will be very easy. Given all of this, I think FDI investments into the radio sector in India will be limited.

     

    Mr Barua on the same said,” I’m still not sure if the rise will encourage new players to enter the market. The rise is there but when it comes to analysing it, I have always encouraged a higher percentage. In my opinion this rise is not high enough and leaves us with a doubt if it will actually egg on more foreign players”.