Dodging Foreign Imprint - (Hamarashehar.Org, 19/02/2001)

-- By Dasu Krishnamoorty

The high drama of the Reserve Bank of India permitting the Mid-Day group of newspapers of Mumbai to seek foreign investment and hurriedly retracting the permission went without much notice in the mainstream press this week. The bank hurriedly withdrew a lesser-known notification permitting foreign venture capitalists, financial institutions, and NRIs to buy shares and convertible debentures of Indian newspaper companies. It calls for inquiry into how the Midday managed to defy the state diktat about foreign investment in print media by launching a public issue for export of fully-paid shares to foreign institutional investors (FIIs) to their place of incorporation if they so desired. It is unbelievable that the Reserve Bank of India gave clearance to the IPO (initial public offering) without consulting either the finance ministry or the ministry of information and broadcasting. The bank could not have been in the dark about a 1955 union cabinet decision barring foreign investment in print media nor about the implications of Midday challenge. The company's director feigned ignorance of the need to get permission of the I&B ministry for FII investments. Somehow, this nonchalance is difficult to explain except as the outcome of the permissive environment created by economic reform. There is a deliberate attempt to try and shrink the jurisdiction of the state in vital and sensitive areas like the media. If the government does not pick up enough courage to snuff it, it will only lead to a large scale influx of foreign investment in the print area to which there is massive opposition from Indian press with the exception of newspapers like Anand Bazar Patrika which is seeking a tie-up with the Financial Times of London.

This adventure was staged at a time when the Indian press has divided itself into two irreconcilable camps, supporting and opposing the entry of foreign investment in print media. The third party to the debate is the government, which is dogged by indecision on allowing foreign media companies to strike a base in the country. A less vocal and visible constituency is the reading public who have a stake in deciding what content they are consuming. They too have joined the debate after witnessing how the multiple TV channels, which proliferated after the Indian skies have opened up for them, have impacted the patterns of cultural behaviour and lifestyles in the country and the gaping cleft it created between the creamy layers of the society and the rest of it. The economic reform of the nineties whetted the appetite of the industry to gain greater control of the media and to garner additional revenues through tie-ups with foreign print media. The Midday success would have unleashed a rush of foreign capital eager to swamp the Indian media through tie-ups or take-overs. This is bound to spell the doom of the very dynamic language media which are doing a better watchdog job than the English press.

In fact, no controversy dogged the first decision of the Union Cabinet in 1955 to bar the entry of foreign print media and investment by companies in the media sector. But when some newspapers emboldened by the liberalisation wave and some prodding from foreign aspirants, began challenging the 1955 decision, five major organisations asked Prime Minister P.V. Narasimha Rao in the fall of 1994 to take immediate steps to check the entry of foreign print media into the country because it would pose a serious threat to the country's sovereignty. The opposition came from All-India Newspaper Employees Federation, PTI Employees Union, National Union of Journalists, the UNI Employees Federation, the Editors' Guild and the Media Watch Group. The All India Newspaper Editors Conference too endorsed the plea to deny entry to foreign media. At the same time, R.S. Sarkaria, chairman of the Press Council at that time, said that foreign media were basically eager to enter India for commercial gain and that their record showed that pubic service was not a priority for them. As early as 1992, the council had told the government that it did not favour publication of foreign newspapers and news journals in the country involving equity and management participation. P.B. Sawant, who succeeded Sarkaria as Press Council chief, warned that along with the indigenous small, medium and language press, the domestic news agencies would also have to wind up as consequence of the influx of foreign media.

Two years later, B.S. Adityan, Chief of the giant Dina Thanthi group and president of the Indian Newspaper Society, which is a forum of Indian newspaper publishers, told its 57th annual meeting that the press was as strategic a sector as defence and nuclear energy and therefore should be out of bounds for foreigners. The INS officially passed a second resolution in September 1999 expressing concern over reports that the government might change its 1955 decision of barring entry of foreign media. When information minister Sushma Swaraj made last year a faux pas of calling for a national debate on the question, the backlash was severe and opposition to any revision of the 1955 policy hardened further. The Press Council and the INS told Sushma that even the advent of the Internet did not merit a go-back on the decision. She brought down on her the combined wrath of all editors' and journalists' organisations in the country. The country's most well known journalist Kuldip Nayar said Sushma's remarks were contrary to the undertaking given in Parliament by her predecessor Arun Jaitley ruling out any such move.

But the most telling rejoinder to Sushma's, perhaps innocuous, remark came from N. Murali, the Joint MD of the venerable "The Hindu", in an interview to Kaveri Bamzai published in the Times of India (7 November 2000). Referring to the political argument against foreign investment, he told Bamzai: "Look at Rupert Murdoch and how he dabbled in the politics of Great Britain, first supporting Margaret Thatcher and then withdrawing his backing to her successor publicly and then promoting Tony Blair. In the US, even Murdoch had to change citizenship to be eligible to own both newspapers and television stations because of cross-holding restrictions. And in Australia, which limits foreign investment to 25 per cent, look at the trouble Conrad Black, who is Canadian and owns the "The Telegraph" in England, was put to in his bid for the Fairfax group of newspapers. This stand is not only peculiar to India where communalism or Kashmir are very sensitive. Given the high rate of growth of regional media, I think the Murdochs of the world would definitely see the potential for investment here. I think if that happens, it will be really damaging to the pluralism and diversity of our media. Look at the US, where regional identities are so strong. There is only one dominant paper in every region."

Eminent jurist V.R. Krishna Iyer says: "At a time when privatisation, liberalisation and globalisation, with lethal potential, strive to occupy economic and cultural space, the matter of defending the autonomy of the Indian print media and even electronic media assumes grave importance. Foreign invasion can creep into our nation by strategic uses of foreign news media. Indeed, election financing, candidate boosting and character assassination of leaders of national movements could all be engineered by outside interests if newspapers and journals and other communicators enter our territory, manage our politics and economics, and condition our cultural identity and critical faculty. We must always keep in mind the grave possibilities of foreign media subversions working from inside India itself. As the Union Carbide disaster had demonstrated the jurisdiction of the Indian law can be jettisoned by the MNCs. The menace of the foreign print and electronic media, symbolically expressed as the Murdoch syndrome, must alert the broad patriotism of the Indian media, not to be xenophobic but to be guardians of national interests."

Supporters of foreign entry find a voice in the editorials of The Indian Express, which is ironically a prominent member of the INS, which is opposing foreign equity in print media. In the context of a plea to ban telecasts by foreign TV companies, it says that "in an age when the emphasis is increasingly on free flow of information, these companies should be permitted to operate subject to the laws of the land. The same applies to the publication of foreign papers and journals in India involving equity/management participation." The inanity of this logic has been exposed several times. Audio-visual messages reach audiences which are different from readers of print media. Also, the theory of free flow of information has been rejected by victims of western media. To invoke it is equivalent to joining hands with forces not very friendly to the Indian reader public. In 1994 the Delhi High Court had dismissed petitions challenging the entry of foreign newspapers into India. This, however, did not change the status of the 1955 cabinet decision. Welcoming the high court dismissal, the Indian Express says "the nation has to develop the necessary self-confidence to come to terms with competition." Is there any newspaper in India, which can beat off an invasion by Murdoch if the law permits him? Is it difficult for Ted Turner to buy up any one of India's two news agencies, when he could just give a billion dollars to rehabilitate the UN organisation? What competition is the Express talking about?

The government has to do a lot of explaining in Parliament about how the concerned state agencies turned the Nelson's eye to violations of the 1995 cabinet decision. Because as a Times of India editorial says "the blunt truth indeed is that unlike consumer goods, newspapers and news magazines are "mind products" in the fullest sense of the term. They reflect and shape issues of public concern. Television also does that, but only to a limited extent. The Americanisation of mass culture world-wide is bad enough. Far more insidious, however, is foreign control of news and current affairs publications. It is for all these reasons that the captains of the Indian newspaper industry, unions of journalists and media analysts have in their overwhelming majority opposed FDI in print. And so has almost the entire political establishment."

Franchising is another device, which provides backdoor entry to foreign print media. American women's magazine Cosmopolitan and the semi-technical magazine Computer World have upstaged state vigil through franchising. R. Ramachandran (The Economic Times, 10 October 1996) writes: The arrangement of 'franchise agreement' is being used to get around this (1955) policy. In permitting this, the government has clearly erred. " Ramachandran's article is a brilliant expose of the manoeuvres of foreign newspapers to wrench a foothold in the Indian market, of course, with help from Indian collaborators. It reveals the failure of the attempts of its Indian publisher to pass off the magazine as an Indian publication through an imprint which shows that the editor and publisher are Indian. While there is a slogan 'For Sale in India Only' on the cover, there is a fine print elsewhere which reads " Copyright 1996, Living Media India Ltd. All Rights Reserved Throughout the World. Reproduction in any manner is prohibited. Published by Aroon Purie. Published and Distributed Monthly with Permission of the Hearst Corporation, New York, by Living Media." The contradictions are glaring. "For Sale in India Only' does not jell with "All Right Reserved Throughout the World.' More revealing is the Editor's note, which says "October is the month Cosmopolitan comes to India." Last week's episode shows that there are forces in the government which help outsiders to circumvent the law, for consideration.