Should India let more FDI in media?

Mint ( the business newspaper) is easily one of the most exciting things to look forward to every morning. It has a fantastic coverage of daily news, great edit pieces and above all - all is in a very easy readable format.

It recently put up this survey asking media barons whether they would like more FDI in their sector. Mint provides more light on the need for the survey:

The sharp limits on foreign direct investment (FDI) in Indian news media has always been a controversial issue. Back in 2002, India did relax its stringent laws to allow 100% FDI in non-news media but imposed a 26% cap on such investment in news ventures. Until now, it has been widely assumed that it is the Indian government that is unwilling to relax FDI norms in news businesses despite media owners wanting more foreign investors….’

But, on her last day as India’s information and broadcasting secretary, Asha Swarup told Mint (www.livemint.com/swarup) that the government is not likely to raise the ceiling on FDI in news media because “there has been no real demand from the industry to raise the FDI cap in the sector”, adding: “We have all along said that we will be happy to take any step to facilitate the growth of the industry but the industry hasn’t demanded it.”

The survey had 12 major media barons. The results are:

6- in favour of FDI
4- not in favour
2- not known

Why I posted this development? Well, we often come across in most business newspapers commentaries from various people that India should open up its various sectors to foreign investment. You hardly come across articles which suggest otherwise. You might come across articles which say trade isn’t as beneficial but overall Milton Friedman wins hands down as far as views in newspapers are concerned.

So, it is always interesting to know how the media itself feels about opening up of its sector. Out of 12, 4 are not in favor. What I found more interesting was that out of those 4, one is a leading propounder of free markets/foreign investment  theory! I don’t remember reading one article in the paper which goes the other way for a long long time. Even if the media baron was giving his views, still it says a lot. I even found the reasoning absurd (atleast by its own standards).

Someone told me a while back, it is fashionable to talk about competition etc as long as it does not affect your own sector. I see it working somewhat in media as well.