New Delhi: India has decided to allow the publication of local editions of foreign news and current affairs magazines, lowering a significant hurdle to entry of more foreign news media into the country.
The changes, announced by the Indian cabinet, reiterated the 26% cap on foreign direct investment into Indian news print ventures.
But, the latest relaxation means that news magazines such as Time, Newsweek, The Economist or BusinessWeek, can now enter into an agreement with an Indian publisher to publish cheaper Indian editions with up to 100% foreign content, and to sell advertising in India for the publication. There were major restrictions on both those fronts until now.
The new policy retains significant content and advertising restrictions on foreign newspaper ventures in India, continuing a policy of discriminating in favour of television news and, now, news magazines over newspapers.
The government claimed that the magazine decision was based on letting Indian readers “access the foreign magazines at cheaper rates compared to the same publications imported at much higher rates”. Information and broadcasting minister Priya Ranjan Dasmunsi also claimed that “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.”
Meanwhile, the decision will immediately benefit two Indian media houses that have announced agreements with foreign magazine publishers. The Anand Bazaar Patrika Group had joined hands with Time Inc. for an Indian edition of Fortune magazine, while Television Eighteen India Ltd (TV18) said it was teaming up with Forbes Media, the publishers of Forbes magazine, to publish a business magazine in India later this year.
Thanks to the changes, both groups will now be allowed to use the foreign title—if they want to—and unlimited content from their partner’s magazines, potentially lowering significant news gathering costs in India for new business magazines. Newspapers are still restricted to using no more than 20% foreign content.
“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, of which TV18 is a part. Until now, it was widely believed TV18 would use a name associated with the Forbes brand but not Forbes itself. ABP chairman Aveek Sarkar declined to comment.
“It’s a very positive development, and a long overdue one. The government should extend this to newspapers, too. The India Today group will now move to bring relevant news titles to the Indian reader,” said Aroon Purie, chairman, Living Media India Ltd, the publisher of magazines such as India Today.
Many foreign editions of news magazines are sold in India, through distribution and marketing arrangements with local publishers. Living Media, for instance, 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. His company procures ads for the magazine from India and the copies of Time Asia, which is what is sold in India, carries those ads. Outlook president Maheshwar Peri said he has a similar arrangement with Newsweek, which, he said, sells 35,000 copies in India.
Peri, who is also the president of the Association of Indian Magazines, said the next step should be to raise FDI to 49%.
A 2008 report by industry lobby Ficci and consultant PricewaterhouseCoopers, estimated India’s print media to be a Rs14,900 crore annual industry in terms of revenues. Newspapers accounted for 87% of the total industry, while magazine publishing was estimated to generate Rs1,900 crore in revenue. The report projected that the magazine segment will see a compounded annual growth rate of 15% during 2008-2012 to become a Rs3,800 crore business by 2012, but some of that positive assessment has been tempered by industry surveys that show falling readership, especially for business magazines.
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.