Wall Street Journal India plans put on ice

The Dow Jones/Bennett Coleman venture to launch an Indian edition of the Wall Street Journal was announced at least two years ago. Now, one of its competitors, the Business Standard (in which the Financial Times has a stake) reports that the plan is on hold.

We have reported in the past that India's regulatory environment looked much more promising than China's. But, we have also commented before on the capacity of India's bureaucrats to scupper promising sounding deals.

In this case, it appears that a rather major bureaucratic roadblock has appeared for those wishing to launch Indian editions of foreign newspapers: the foreign companies can own up to 26% of these ventures and they can sell subscriptions. They can't, though, sell advertising to local Indian companies according to the report, quoting the WSJ's Raju Narisetti:

“Papers cannot be run just by circulation. Advertisements are essential for this business, without which it (the WSJ) may cost Rs 50, so to speak,” he said.

“If the official reason for such a policy is about the western influence then why is BBC and CNN here. Television is even watched by people who don’t read newspapers,” Narisetti said.

The current policy allows foreign news channels to carry advertisements of local companies, while foreign papers can only print a facsimile editions without any advertisements of local companies.