New Delhi: The union cabinet has decided to bring foreign direct investment (FDI) norms for news television channels on par with the print media. This means only those news television channels with up to 26 per cent FDI (including foreign institutional investments, overseas corporate bodies and non-resident Indian funds) will be allowed to uplink from India.

According to government guidelines, channels with news bulletins and current affairs programmes will be deemed as news channels and those with 24-hour entertainment programmes will be treated as entertainment channels.

Pure entertainment channels can continue with no cap on foreign investment, says Parliamentary Affairs Minister Sushma Swaraj. This announcement will affect the Star group the most since it has plans of launching a news channel in April 2003, after its contract with NDTV expires on 31 March 2003.

The Star group will now have to scout for an Indian partner and make a fresh application for a news channel and the Indian holding in the company applying for Star News channel will have to be at least 74 per cent. Star News Broadcasting is a wholly owned subsidiary of the Star group, which is in turn wholly owned by the Rupert Murdoch-controlled News Corporation.

Also news channels in operation currently which are not conforming to the equity pattern will get one year to rectify their foreign holding position. This includes the Zee Network, which has about 54 per cent of foreign equity, of which 28.5 per cent is foreign promoters’ stake.

Several months ago Star News Broadcasting applied for uplinking permission for its news channel after which the government started a rethink on the issue. There are several contentious issues regarding the Star group. One is that it has foreign ownership; it has its head office in Hong Kong and registered office in British Virginia Islands.

Also, the company has three foreign directors — two American and one British. As for the others: Zee’s foreign holding is around 53.54 per cent (the foreign promoters’ stake is 28.50 per cent) and NDTV’s is at 16.47 per cent.

Currently, the various news channels waiting to get uplink permission are Star News, NDTV’s Hindi news channel, TV Today’s English news channel, the Videocon group’s Bharat Business Channel and Rajat Sharma’s India TV.

So far, the government had permitted all channels, irrespective of ownership, to uplink from India.