HuffPost India Shuts Down: A victim of India’s new FDI policy?
HuffPost India, the Indian web journal of the US-based digital media company, shut down on Tuesday after six years of operation, abandoning the 12 journalists who worked there.
HuffPost India closing comes due to the direct influence of the Modi government’s recent policy restricting foreign investment (FDI) in digital media publications. Nearly four weeks ago, the government of India outlawed all foreign-owned companies from publishing news and current affairs content in India or even supplying reports to Indian entities The only exemption would be if the foreign company curtails its shareholding in the Indian unit to 26% or less over the next one year.
Even for this, the foreign company has to assign for special approval to maintain its 26% share in the Indian unit, and the government can refuse permission.
The order wraps social media outlets like Facebook, Twitter, Google, and YouTube, as well as solely news-oriented apps and foreign-owned news agencies. At the same time, the ban does not comprise all foreign-owned websites and apps, but only those that are “located” or “registered” in India.
“It would be impossible for BuzzFeed, who bought HuffPost, to operate in India given the new FDI regulation,” an inside member of the firm said, as reported by The Wire.
The closure of HuffPost India followed the sale of HuffPost, previously possessed by Verizon another US media Company, Buzzfeed, in a deal that left India and Brazil orphaned for legitimate troubles.
“The India team was surviving with a grace period. Verizon Media wouldn’t have been able to own them for much longer either. Foreign companies aren’t allowed to control news organizations and BuzzFeed India can only operate because we are a culture and entertainment property”, CEO of BuzzFeed, Jonah Peretti, said, and further explained the closure of HuffPost’s Brazil site was associated with BuzzFeed’s previous decision to license out BuzzFeed Brazil to a local company and a no-compete agreement that went along with that license.
On November 24, Indians who visited the website HuffPost.in, read a message announcing, “As of November 24, HuffPost India will no longer be publishing content. For more great global content, please visit HuffPost.com. We thank you for your support and readership.”
However, none of its initial content is available anymore on the website, we understand that the entire Indian archive is in the process of being redirected to HuffPost.com. as tweeted by Columnist Rituparna Chatterjee, who was one of the website’s founding editors.
On the same day, Huffpost’s Brazil site also disclosed its shut down procedures, thanking its observers with a remark from the editor and highlighting the site’s most important stories.
Huffington Post India Private Limited was integrated as a subsidiary of a foreign company in 2015 with authentic capital of Rs. 6.5 crore and paid-up capital of Rs. 3.15 crore. Under the current government order, the holders of the company, Verizon, would have until October 2021 to reduce their shareholding to 26%.
Ironically, while the Modi government’s recent rules prey on companies, nothing stops HufffPost’s new holders from running an Indian edition on the prevailing HuffPost.in URL instantly as an investment of the parent company and hiring journalists in India to create news content. Since there would be no India-based firm entailed, there would be no FDI rules to pursue.
FDI rules for material media products can act as a beneficial entry barrier since newspapers and broadcast television compel a territorial presence – to print and circulate copies or uplink/downlink satellite signals and have them physically administered through a cable TV network.
While, when it comes to digital media, a foreign held company can publicize a news website from offshore and have it accessed by Indian citizens regardless of what India’s FDI laws say.
Of course, the FDI laws would dominate the comfort of doing business but nothing stops foreign media companies from employing sales staff in India either or contracting an Indian agency to do the job. Among many major stories that HuffPost.in updated this news was sure, an indicator of the lack of transparency in the Modi government’s judgment to launch electoral contracts as a means of political financing and how the suspicions of the Reserve Bank of India were overruled. Disheartened by the news of the shutdown, netizens & journalists took to Twitter to express their grief.
Read the tweets here:
Today is @huffpostIndia’s last day. Pound for pound, story for story, reporter for reporter, this is the greatest newsroom I have worked for; (and I still can’t quite believe I had the privilege to lead)
Thank you everyone for reading our stories and supporting our journalism
— Aman Sethi (@Amannama) November 24, 2020