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  • Voltaire Staff

BBC hands over Indian news operation to private firm over FDI cap

Pushed against the wall by the new FDI requirements, BBC, the public service broadcaster headquartered at London, has transferred its newsroom publishing licence in India to Collective Newsroom, a private limited company.

The shift marks a departure in the broadcaster's global operations and comes after the Income Tax department conducted searches at BBC's offices a year ago, reported Business Today.

Established by four former BBC employees, Collective Newsroom, a fully India-based company, is set to commence operations on April 10.

The company will be responsible for creating content for BBC's digital platforms in seven languages, namely English, Hindi, Gujarati, Marathi, Punjabi, Tamil, and Telugu.

Collective Newsroom Private Limited, as per records from the Ministry of Corporate Affairs, was established on October 27, 2020.

Rupa Jha, CEO of Collective Newsroom, told The Indian Express that while BBC was their inaugural client, they maintained non-exclusive ties.

Jha said that their content will strictly adhere to BBC's Editorial Guidelines, preserving the integrity and trust associated with the BBC brand.

"It's unprecedented for the BBC to grant their license to publish to another entity... We will not compromise our journalism and the BBC is solidly behind us," she said. 

The restructuring was prompted by new Foreign Direct Investment (FDI) regulations introduced in 2020, which imposed a 26 per cent limit on FDI in India's digital media sector.

In order to adhere to these regulations by October 2021, BBC, which initially sought a 26 per cent stake in Collective Newsroom, had to reduce its foreign investment.

According to Jha, the approach was selected to sustain BBC's presence in India without resorting to job cuts or financial instability.

"There were a number of options before us. Considering that the BBC didn't want to lose its presence in India or cut jobs, and they didn't want to become financially unviable, this forced us to think out of the box. Based on the legal advice the BBC was receiving, everyone was veering towards this as the viable option (of setting up the Collective)," she said. 

In September 2019, the Commerce Ministry recast FDI rules for news digital media by capping FDI to 26 per cent with government approval, as well as several other conditions, such as majority Indian-origin directors and CEO, security clearance for foreign personnel, and immediate action related to resignation or termination of the concerned persons if clearance is rejected or withdrawn.

In February 2023, the Income Tax Department conducted searches at BBC's Delhi and Mumbai offices shortly after the broadcast of a documentary on the 2002 Gujarat riots, which allegedly implicated Prime Minister Narendra Modi.




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