The Indian government has given its approval to review the print media policy by allowing local publication of foreign periodicals publishing news and current affairs.

Foreign direct investment to the tune of 26 percent would be permitted in this category, the Union Cabinet said.  The government's decision is expected to provide Indian readers access to foreign magazines at cheaper rates in comparison to the same magazines imported at much higher rates.

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, the government said. Currently, foreign news magazines like The Economist, BusinessWeek, NewsWeek, Fortune, Forbes and Time are imported into India and distributed by local publishers, which make them costlier for readers.

However, the government said permission would be granted for publication of those foreign magazines that are being published in the country of their origin, continuously for a period of at least 5 years, and the publications must have circulation of at least 10,000 paid copies for the last financial year in the country of its origin.

However, permission of publication of such magazines would only be granted to Indian companies that are registered under the Indian Companies Act, 1956. At least 3/4th of the directors on the board of directors of the applicant company and all key executive and editorial staff should comprise of resident Indians, the government said.

The title of the magazine would have to be verified and also registered with the Registrar of Newspapers for India (RNI). The Indian company would be allowed to enter into financial arrangements (such as royalty payment arrangements, etc.) with the owners of the foreign magazine and besides publishing content that are identical to the foreign magazine concerned, the Indian publisher would be free to add local content and insert local advertisements.

Till now, facsimile editions of foreign magazines were allowed in India, which meant that neither local content nor local advertisements could be inserted. Earlier, in 2005, the government had relaxed rules regarding local editions of foreign non-news magazines that saw a flood of foreign publishers like Condé Nast (publisher of fashion magazine Vogue), Rodale Inc. (publisher of women's health magazine Prevention), Axel Springer (publisher of auto magazine Autobild) and Time Inc. (publisher of People, a magazine that focuses on life of celebrities) rushing in to tie-up with Indian publishers.

"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, publisher of magazines such as India Today.

"It was long overdue. An artificial hurdle has been removed. But better late than never," said Maheshwar Peri, publisher and president of the Outlook Group.

In the print media sector, the government has so far put a 26 percent FDI cap in ventures relating to newspapers and a 74 percent cap on such investment in non-news, non-current affairs or specialty publications (such as technical and educational magazines).

According to industry estimates, the Indian magazine publishing market is expected to grow to nearly $1 billion by 2010 from the present $450 million.

In July, in a report titled Global Entertainment and Media Outlook 2008-2012, the world's largest professional services firm, PricewaterhouseCoopers (PwC) said India is one of the top three markets for global collaboration in entertainment and media because of a "relatively friendly foreign investment regime."

The report said that print publication advertising revenues in India generated $2.5 billion in 2007. Sustained economic growth and entry of new breed of advertisers in India, PwC said, would ensure a steady print advertising compounded annual growth rate (CAGR) of about 15 percent annually (higher than the global projection of about 3 percent annually).

Source: International Business Times