On November 24th, just five days after BuzzFeed announced the acquisition of HuffPost from Verizon Media in an all-stock deal, the articles on HuffPost India’s website began redirecting to a notice announcing its closing. Shortly after, all HuffPost employees in India were laid off, bringing an end to six years of HuffPost’s presence in India, and two and a half years of exceptional journalism under editor-in-chief Aman Sethi.
To understand why BuzzFeed decided — or was forced — to shut down HuffPost India, it’s necessary to look at how digitization has changed the media landscape in India.
The last decade has seen an explosion of internet usage in the country: data prices, which, at the beginning of 2010, were as high as $6 per gigabyte at 2G speeds, are now as low as $0.13 per gigabyte on 4G. Many internet plans offer 1GB per day to users, and, on average, Indian internet users burn through about 11GB of data per month. It took around 16 years for India to get to 100 million internet connections, and less than a decade after that to reach almost 700 million.
This explosion has made India the hottest internet market in the world: it has the largest number of Facebook, YouTube, WhatsApp, and TikTok users (before the latter was banned), and many people rely on the internet as their only source of news. It’s likely that more news is consumed via WhatsApp than through India’s largest TV channel or newspaper. Unrestricted by the physical limitations of print — or having to rely on government advertising and licensing — digital newsrooms have been able to cater to a mass audience and do better and deeper stories.
Digital media also had an advantage in that it has not been subject to the same restrictions as print media. Up until the 2000s, foreigners were banned from investing at all in Indian print media. That changed in the early 2000s, when the limit was raised to 26%. On a 2008 visit to India, media mogul Rupert Murdoch lobbied then-Prime Minister of India Manmohan Singh to increase that ceiling. “We don’t see ourselves [News Corp] taking a stake in print — because it is not available and because we won’t want to take just a 26% stake,” he said during that trip.
A few years later, in 2015, News Corp took advantage of what appeared to be a gap in regulation by buying an online news business, which wasn’t subject to the same investment restrictions as print. VCCircle was a venture capital and private equity–focused publication that seemed to be an ideal companion to the Dow Jones: it produced subscription news, ran a database service called VCCEdge, and organized business events. This was the first outright purchase of a digital Indian publication by a foreign investor.
Others took advantage of this loophole as well. Over the past decade, U.S.-based publications HuffPost, Quartz, and Vice set up operations in India, and many new ventures launched, including The Wire, The News Minute, Swarajya, and The Quint. The New York Times experimented briefly with India Ink, an India-specific blog, and The Wall Street Journal launched India-focused Hindi and English blogs — as well as a stand-alone India edition — only to eventually shutter them all. Omidyar Network, an investment firm launched by PayPal founder Pierre Omidyar, invested in upstart digital news outlets Newslaundry, Scroll.in, and The Ken; and news aggregators Inshorts and DailyHunt also raised substantial foreign funding. (DailyHunt currently has over 250 million monthly users and is believed to be valued at over a billion dollars.)
It was only a matter of time before the sector caught the government’s attention. In September 2019, the Indian government restricted foreign investment in digital media focused on “news and current affairs” to 26%, same as print. It also installed additional controls, including the stipulation that a foreign investor must obtain government approval to purchase a stake in a digital media outlet. A couple of months later, officials floated a draft law that would require digital media publishers to register with the government agency that oversees newspapers. Last month, a “clarification” was issued, giving digital news publishers and aggregators a month to submit their shareholder structure to the Indian government. Any digital media company with more than 26% foreign shareholders was given a year to restructure and bring the number within legal limits.
Eight days after this clarification, HuffPost India shut down.
Months before this, in July, News Corp exited the news business in India by selling the entirety of its 100% stake in VCCircle for less than a million dollars, a remarkably low valuation. DailyHunt is now believed to be reworking its shareholder structure to stay within the FDI limits. Three different digital media lobbying groups have formed to engage the government, and digital media publishers are scrambling to figure out what to do next. Some are considering relocating their headquarters to Singapore to escape the restrictions. At the same time, one publisher told me last week that he isn’t even sure whether these measures will cover his business, given the lack of clarity around how the Indian government defines “news and current affairs.”
Why is all this happening now? In some respects, the answer is simple: The Indian government, like all governments, views news outlets as instruments of influence. Historically, governments in India have exercised control over print media by withholding advertising, restricting the supply of newsprint, limiting foreign investment, and, on occasion, refusing to grant access or participate in media-sponsored events. Members of the current Modi administration have been especially clear about their dislike of the press: early in his tenure in the Ministry of External Affairs, retired army general VK Singh referred to journalists as “presstitutes” on Twitter in response to criticism over an insensitive remark. TV channels have been taken off the air for questioning the government, advertisers have been pressured into pulling ads, and journalists have been charged with sedition. In comparison, the government has had few levers of influence over online media.
The restrictions on foreign investment and the mandatory registration of digital media entities have created more questions than answers. It’s not clear, for instance, whether the new regulations will apply to publications that focus on legal affairs or ones that cover advertising or technology. Nor is it obvious how this will impact platforms with user-generated content — like Reddit, YouTube, Twitter, and Facebook — or services like Disney+Hotstar, which feature current affairs shows like John Oliver’s “Last Week Tonight” alongside nonpolitical entertainment.
The concerns about news aggregators are slightly different: given their large user bases, they wield significantly more influence than traditional publishers. In 2018, a report in the newspaper DNA cited concerns expressed by several national security agencies over China-based aggregators UC News and NewsDog, which ran local-language content and were increasingly popular in second-tier Indian cities. According to sources in the report, these outlets could be used not only for cyberattacks and spying but also to foment unrest, stoke communal tensions, and compromise elections by spreading fake news. When more than 200 Chinese applications were banned earlier this year, UC News and NewsDog were among them.
The Indian government has claimed that media regulation is a matter of national security. (No matter that under current law, defense businesses in India are allowed to have up to 74% of their investment come from outside the country.) This line of argument conveniently leaves out the fact that, by controlling their purse strings, the government can weaken the ability of the fourth estate to do its job. Nor does it acknowledge the power the government acquires in suddenly being able to cancel a media outlet’s license. Finally, it’s notable that the government’s position is aligned with that of entrenched media interests: Large Indian media conglomerates, most of which are family-owned businesses, have historically supported the restriction on foreign investment since it limits competition over advertising.
Restricting foreign investment in media, whether print or digital, has a clear effect — it disproportionately and unconstitutionally limits free speech. It handicaps publications’ ability to report and distribute news and, in some cases, blocks outlets from even launching in the first place. Mandatory media licenses and other regulatory frameworks go even further, forcing news outlets to depend on government benevolence. Taken together, these measures not only threaten access to diverse, high-quality journalism — they threaten India’s very status as a liberal democracy.