CIR. NO. 06/2005-06-RB, DT. 11/08/2005

Foreign Investment in Print media sector

Attention of the Authorised Dealer (AD) banks is invited to Regulation 5 (2), 5 (3) (i), (ii) and 5 (5) of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time, which prohibits investment in the shares or convertible debentures of an Indian company engaged in print media sector by Foreign Institutional Investors (FIIs), Non-Resident Indians (NRIs) and Foreign Venture Capital Investors (FVCIs).

2. On a review, it has been decided by Government of India to permit Foreign Direct Investment (FDI) and portfolio investment within the composite ceiling of 26 per cent of the paid-up capital of an Indian company publishing newspapers and periodicals dealing with news and current affairs. Accordingly, Reserve Bank has issued a Notification withdrawing the prohibition placed on FIIs, NRIs and FVCIs to purchase shares of an Indian company engaged in print media sector. Further, the Indian company accepting FDI would have to comply with the guidelines issued on July 13, 2005 by the Ministry of Information and Broadcasting in this regard, available on http://mib.nic.in/informationb/CODES/FDI2130705.htm .

3. A copy of Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) (Fifth Amendment) Regulations 2005, Notification No. FEMA 138/2005-RB dated July 22, 2005, has been notified by Government vide G.S.R. No. 505(E) dated July 25, 2005 is annexed.

4. Authorised Dealers may bring the contents of this circular to the notice of their constituents/customers concerned.

5. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully,

(Vinay Baijal)
Chief General Manager

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Annex

Notification No.FEMA.138/2005-RB, DT. 22/07/2005

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