The United Kingdom’s state-owned broadcaster, the British Broadcasting Corporation (BBC), has transferred its newsroom in India along with its publishing license to a private limited company established by its Indian staff. Notably, this marks the first instance of such a move in the public service broadcaster’s global operations. The development comes less than a year after the BBC faced scrutiny from Indian tax authorities for tax evasion.
Under the new arrangement, the private limited company named “Collective Newsroom” has been established by four former BBC employees. It will start its operation from next week. The offices in India will create content in seven languages for the BBC’s digital services, including Hindi, Gujarati, Marathi, Punjabi, Tamil, and Telugu.
As per reports, the BBC has applied to the Indian government for a 26% stake in this private limited company.
Speaking to The Indian Express, Chief Executive Officer (CEO) of the Collective Newsroom Rupa Jha said, “It’s unprecedented for the BBC to grant their license to publish to another entity…We will not compromise our journalism and the BBC is solidly behind us.”
Jha was the senior news editor at BBC India and is now one of the four founding shareholders of Collective Newsroom, the new entity curved out of the UK’s state-owned broadcaster.
Regarding the restructuring plan, Jha said, “There were a number of options before us. Considering that the BBC didn’t want to lose its presence in India or cut jobs, and they didn’t want it to become financially unviable, this forced us to think out of the box. Based on the legal advice the BBC was receiving, everyone was veering towards this as the viable option (of setting up the Collective).”
The new Foreign Direct Investment (FDI) rules, introduced in 2020, imposed a 26% FDI limit in India’s digital media sector. This has prompted the broadcaster’s India operations to undergo restructuring to comply with the FDI rules.
Previously, BBC India handled editorial operations in the country, with the UK broadcaster owning over 99% of it. However, when the investment cap came into effect, companies with over 26% FDI had to reduce their foreign investment to meet the regulation by October 2021.
The BBC’s India bureau has approximately 200 staff, making it the biggest operation globally outside the UK. It started broadcasting in India in May 1940. As per reports, almost all of the 200 employees of BBC India have transitioned to the Collective Newsroom.
Last year, in February, tax authorities conducted searches at BBC’s offices in Delhi and Mumbai to probe tax violations. The IT Dept had investigated non-compliance with transfer pricing rules and diversion of profits. The three-day-long investigation concerned international taxation and the suspected transfer of BBC revenues.
Later on 12th April 2023, the Enforcement Directorate filed a case against BBC India under the Foreign Exchange Management Act (FEMA) over allegations of violating foreign exchange laws.
Months later in June 2023, BBC reportedly admitted that they evaded taxes in India and were committing to pay Rs 40 crores in tax arrears.
Following the tax probe and FDI questions, the BBC has transferred its newsroom and publishing license to a private company, ‘Collective Newsroom’, established by its employees which will begin operation next week.