100% FDI in Film industry

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 theAdvertising 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