There are mainly two problems- What will happen to a digital media company with over 26 percent of overseas investment and how will the new FDI policy of the digital sector treat news aggregators?
The Department of Promotion of Industry and Internal Trade (DPIIT) will soon be issuing a clarification on the issues raised by few stakeholders where the Government decides to permit only 26% FDI in the digital market sector.
Various industry experts have been showcasing their distress over the decision to cap foreign direct investment (FDI) in the digital market sector to 26%. It throws up many questions that are unanswered to all the people who were looking to raise funds through similar means.
The main two-issue here is how the FDI policy is going to treat the news aggregators and what will be the fate of digital media companies, who have overseas investment more than the legal percent.
On the aforementioned issue, DPIIT is soon expected to issue a clarification, as per the sources.
DPIIT has been in talks with Information and Broadcasting Ministry over the issue.
Apart from digital media companies, this will have a direct impact on the start-up ecosystem. FDI has been a major scale to enable Indian companies to compete in the global market.
Several foreign strategic intermediaries have just set-up their operations in India due to it being categorized as 100 percent FDI under the automatic route. A clarification from DPIIT is critical to so many stakeholders.