FDI Policy For Media

IN Law and Policy | 01/09/2002
An edited version of the following article appeared on the op-ed page of the Business Standard, New Delhi on Monday 24th June,

An edited version of the following article appeared on the op-ed page of the Business Standard, New Delhi on Monday 24th June, 2002, under the title, "Media in the FDI Arena: A blueprint for how the media should be controlled vis-à-vis foreign direct investment."

FDI Policy For Media

Arvind Virmani

The public debate on foreign entry into print media largely treats it as a single, broad, undifferentiated sector, even though most discussants seem to be discussing the narrow issue of foreign entry into the newspaper business. A few discussants may perhaps also have newsweeklies in the back of their mind when expounding their views on this subject. This article tries to put some new ideas into the public arena so that a differentiated FDI policy can be defined for various categories of media.

Ability to compete and to derive the maximum benefit from competition depends on the society¿s knowledge base. A closed economy breeds lazy thinking and action. We can only compete at the frontiers of knowledge if we have access to that knowledge and have absorbed, adapted and incorporated into the knowledge base of our society and economy.

The Indian economy can become a Knowledge based economy by 2025 if we can attain universal access to primary and secondary education in the next decade or so and we open our minds to the best and latest knowledge from all over the world. A competitive, wisely regulated media, both print and electronic, has an important role to play in this process.

A couple of decades ago, most services were considered as non-tradable across frontiers as they had to be delivered at the point at which they are consumed/used. The technological transformation of the communication industry coupled with the developments in transport & travel has transformed the picture over the past decade or two. Even greater changes are in the offing in the next decade as previously non-tradable services become tradable.

What has not been fully realised, however, is that there are many services besides ITES where we have a comparative advantage or could create one, to become a significant exporter and player on the world stage. The common strengths that can underlie this success are:

· They are all dependent on communication facilities, even though the precise type of facility may differ. For instance Radio/TV broadcasting stations and telephone exchanges are both communication facilities, though the former is used for public communication and the latter for private communication. With the rapid pace of technology development we should not be surprised to see in the near future, radio/TV facilities being used for private communication and telephone exchanges for public communication (internet news station).

The use of English in global commerce and trade in services.

The advantages of free and open society, the freedom of information, thought and expression.

There are also some differences between different services. For instance Software is more dependent on analytical skills while media and entertainment is more culture and society dependent. Nevertheless, with globalisation, cultural diversity is itself an advantage that can be exploited to produce a unique product, if merged skilfully with the basic cultural & society specific characteristics of the target audience (artistic joint product/venture).

Automatic 100% FDI should be allowed in the following activities in the print media:
Internet Publishing can be carried out from anywhere in the world and its content sent anywhere in

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