Revision of existing sectoral guidelines for FDI, including investment by non-resident Indians and overseas corporate bodies - FEMA - 04/2002

Government of India Ministry of Commerce Industry Department of Industrial Policy Promotion SIA (FC Division) PRESS NOTE NO. 4 (2002 SERIES) Subject: Revision of existing sectoral guidelines for FDI, including investment by non-resident Indians and overseas corporate bodies Press Note 2 (2000 series) dated the 11 th February, 2000 enclosing the sector specific guidelines for Foreign Direct Investment (FDI), inter alia includes the following provisions for the Advertising and Film sectors : Automatic approval is available for the following: - Up to 74% FDI in Advertising sector. - Up to 100% FDI in Film industry (i.e., film financing, production, distribution, exhibition, marketing and associated activities relating to film industry subject to the following: I. Companies with an established track record in films, TV, music, finance, and insurance would be permitted. II. The company should have a minimum paid up capital of US$ 10 million if it is the single largest equity shareholder and at least US$ 5 million in other cases. III. Minimum level of foreign equity investment would be US$ 2.5 million for the single largest equity shareholder and US$ 1 million in other cases IV. Debt equity ratio of not more than 1:1 i.e. domestic borrowings shall not exceed equity V. Provisions of dividend balancing would apply. 2. With a view to further liberalizing the FDI regime, the Government have permitted FDI up to 100% on the automatic route in the advertising sector. FDI up to 100% in the film sector, which is already on the automatic route, will not be subject to the conditions indicated at I to V above. 3. The provisions of Press Note No. 2 of 2000 series stand modified to the above extent. (M. S. SRINIVASAN) Joint Secretary to the Government of India