The Indian government is planning to bring in fresh clauses in FDI regulations related to the print media, making it mandatory for board representation to be proportionate to the equity held. It would also bring in safeguards to ensure that control remains in Indian hands.

The issue was highlighted in the case of The Hindustan Times, as this is the first application where money (foreign funds) is to be inducted in the print media. This large newspaper group has submitted an application for bringing in 20% FDI from a UK based investor into the newly-formed media company, HT Media. The applicant has indicated that shares would be given out at a premium on the principles of valuation. The government has, on its part, stressed that at least 50% of the FDI should be in the form of new shares. The guidelines do provide for this: At least 50% of the FDI will have to be inducted by the issue of fresh equity. The balance 50% may be inducted through transfer of existing equity, it says.

The policy-makers are expected to insist that with respect to key functionaries, not less than three-fourths of the board of directors, should be resident Indians. They are also expected to state that shareholding should not be distributed without government approval and that no agreements, which would subvert the shareholding, should be concluded with other parties. The rationale being to ensure that control does not slip into foreign hands.