India's G20 Presidency: Promoting Trust and Inclusivity in a Digital World

Description: This report discusses the G20's evolution as a key global financial forum and its increasing focus on digital technologies. With India set to lead in 2023, it proposes a digital agenda, emphasizing trust-building and reducing the digital divide. Seven focus areas include digital corridors, infrastructure, MSME capacity building, open data, technical cooperation, regional collaboration, and frameworks for emerging technologies like AI and 5G. The aim is to foster international cooperation and inclusive development.

Attribution: Chawdhry, Mohit and Agarwal, Rohan. India’s G20 Presidency: Promoting Trust and Inclusivity in a Digital World. Report Issue 008, May 2021, Esya Centre.

Aligning Labour Reforms with India's Digital Aspirations

This Policy Brief comes on the heels of reports that the Central Government has deferred the implementation of the latest Labour Codes, for want of state-level rules.

The latest labour law reforms of the Modi Government constitute four distinct Codes on (a) wages; (b) social security; (c) industrial relations; and (d) occupational, health, safety and working conditions. They were enacted to consolidate and update an obsolete framework.

While the proposed labour reform extends social security benefits to gig workers, its overall implications for the digital economy remains mixed.

The Policy Brief suggests that certain elements of the Codes, remain out of sync with key attributes of the digital economy, namely economies of scale, network effects and the importance of momentum.

Moreover, the new labour codes add rigidity, uncertainty and regulatory discretion in terms of hiring, work hours, labour management and firing costs—that will negatively impact the digital economy.

For instance, the Occupational Safety, Health and Working Conditions (“OSHWC”) Code restricts employers from engaging contract labour in their ‘core’ activities.

The Policy Brief concludes with concrete suggestions which can improve the framework’s overall suitability for Digital India.

These suggestions include a strong focus on targeted income support for gig workers and specific measures to operationalise the delivery of benefits for gig workers under the Social Security Code.

Further, the Policy Brief suggests means to reduce regulatory discretion through i) adoption of clear standards and procedures; and ii) promotion of self-certification schemes for digital businesses.

Attribution: Deb, Sidharth and Chawdhry, Mohit. Aligning Labour Reforms with India’s Digital Aspirations. Policy Brief No. 206, April 2021, Esya Centre.

Digitalising Indian Retail: Capacity Building for a Global Context

E-commerce gained significant attention at the 11th Ministerial Conference in Buenos Aires in 2017, where 71 member states released a Joint Statement affirming their intent to advance negotiations on trade related aspects of e-commerce under the WTO ambit. E-commerce was first recognised in global trade agreements at the Second Ministerial Conference in Geneva in 1998, where member states adopted a Declaration on Global Electronic Commerce and called to establish a Work Programme to examine issues of e-commerce related to trade).

The Work Programme was required to pay specific attention to the economic, financial and development needs of developing countries. India participated in the early rounds of discussion, raising key issues of intellectual property in e-commerce in its communication to the Council for Trade Related Aspects of International Property Rights in 1999. Its representative noted before the General Council the importance of e-commerce, specifically e-retail, for development. But he also stressed the importance of providing adequate policy space for developing states to establish domestic policies to govern e-commerce, and to build capacity among domestic MSMEs. These concerns were echoed by other developing states. As a result of this fundamental disagreement, progress under the Work Programme has been slow in the past two decades.

Recent years have seen a marked shift in the positions of several developing and Less Developed Countries, which are moving now toward a global compact on e-commerce. China, Saudi Arabia, Thailand and Kenya are just a few of the states to have signed and participated in discussions under the Joint Statement Initiative. Another prominent trend is the emergence of regional, interest-based groupings to promote the use of e-commerce for development. For instance the Friends of E-Commerce for Development, a group of developed and developing countries that include Pakistan, Sri Lanka and Australia, are working together to use e-commerce in a manner supportive of local industry and small enterprises. Further, regional trade agreements or RTAs increasingly incorporate clauses related to e-commerce. A recent study found that of 275 RTAs registered with the WTO, 75 contained at least one clause dealing explicitly with e-commerce. Yet India continues to oppose the formalisation of talks on e-commerce under the WTO. In its communication to the General Council prior to MC11, India advocated continuing talks under the existing Work Programme without altering its mandate. Statements from Indian representatives at the WTO show this opposition remains grounded in apprehension, that the entry of global retail brands would significantly hinder the development of domestic retail enterprises.

Failure to develop a more nuanced negotiation strategy at the WTO may have significant consequences for India. It risks being cut off from the preferential market access to be gained from participation in any multilateral or plurilateral agreement. This would hinder the flow of investments into the country, and its integration with the global supply chain. By choosing to completely distance itself from ongoing negotiations, India also loses the opportunity to shape global rules of digital trade. Historically, states that adopted global rules and technical standards have gained a significant first-mover advantage.

To negotiate more effectively at the WTO, India must first build sufficient local capacity, so that domestic products can effectively compete in global markets. It can learn from the experiences of nations such as Malaysia, Singapore and Thailand, which adopted a state-led approach to online retail development, and are able as a result to participate in deliberations under the Joint Initiative.

The focus of this analysis is online retail, a narrower sector than e-commerce. E-retail is concerned primarily with the online sale and purchase of goods, while e-commerce includes a wide range of services such as OTT platforms. A key impediment to India’s participation in global talks on e-commerce is the apprehension that its domestic retail sector will be unable to compete with large global corporations: this can be overcome through capacity building backed by the state, to let domestic retailers harness online retail opportunities, and eventually compete with foreign entities.

This paper attempts to define the broad contours of a specialised development agency that could undertake such capacity building effectively. The next section surveys the existing literature to identify key capacity deficits faced by Indian MSMEs in adopting digital technologies and e-retail. Section 3 outlines India’s approach to regulating e-commerce, contrasting it with the specialised bodies in other developing countries, and identifying certain principles of regulatory design that inform their functioning. Section 4 suggests how these principles could be applied within the Indian context.

Attribution: Mohit Chawdhry, “Digitalising Indian Retail: Capacity Building for a Global Context,” Issue No. 007, February 2021, Esya Centre.

Database Regulation: Examining Existing Approaches and Considerations for India

Regulators around the world are scrutinising tech companies—the US, EU, India and other jurisdictions are filing competition lawsuits against large digital platforms, and the EU as part of its digital data strategy recently released drafts of the Digital Services Act, Digital Markets Act, and Data Governance Act on competition, content moderation, platform liability, and other aspects of digital technology. In India the government recently released draft frameworks for non-personal data regulation (the NPD Report) while a Joint Select Committee in Parliament is deliberating on the draft Personal Data Protection Bill, and the government indicates interest in a focus on developing artificial intelligence and related technologies.

Data is at the core of how digital platforms provide the products and services we use today, and is central to their functioning. It also has wider implications, and the transition from a paper-based system to a digital one offers multiple advantages not always related to technology: permitting better management of information, increasing security and efficiency, and providing information and insights to enable better decision making. Data is also being used at an unprecedented scale, in public service delivery, finance, healthcare, transportation, and marketing. A variety of stakeholders are collecting increasing volumes of data, whether personal, non-personal or a combination of the two.

Yet vast amounts of data are not useful in themselves without ways to make sense of them. This is what many emerging technologies do, from machine learning to the wide range of tools named ‘artificial intelligence’—they are methods to analyse and derive value from large volumes of data, and in many cases the way they work improves when given more diverse data to analyse. It is only possible to do so by ordering and organising data into specific formats depending on the intended use: this is the role of a database.

This paper examines how databases are afforded protection and details some key considerations for database regulation in India. It explores database protections in other jurisdictions, primarily the European Union and the United States. Section 1 defines a database, 2 explores the protections afforded by copyright law, 3 examines sui generis or standalone database protections, 4 explores protection by unfair competition laws, 5 examines the protections prevailing in India, and 6 lists emerging considerations and policy recommendations.

Attribution: Aishwarya Giridhar, “Database Regulation: Examining Existing Approaches and Considerations for India,” Special Issue No. 205, Feb. 2021, Esya Centre

Response to the Second Draft Report by the Committee of Experts on Non-personal Data Governance Framework

We at the Esya Centre are grateful for the opportunity given to us by the Ministry of Electronics and Information Technology (MeitY) to respond to the Committee of Expert’s Report on Non-Personal Data Governance Framework (Report). We appreciate that the Committee has attempted to set out a broad framework that seeks to regulate several facets of the use of Non-Personal Data (NPD) while identifying possible areas of concern. In our suggestions, we engage with the Committee’s key recommendations and identify areas which require greater clarity. We recommend actions that assist in creating effective regulation geared towards achieving defined goals and outcomes. Part I contains the summary of recommendations, and Part II contains a detailed analysis of substantive elements of the Report. We have structured our responses into 4 themes namely: i) the definition of Non-Personal Data, ii) overlaps with existing proprietary frameworks, iii) community data and HVDs and iv) the regulatory architecture.

Moderating Social Media in India: User-Generated Content in an Era of Viral False News, Disinformation and Hate Speech

Social media globally, and in India, is widely afflicted by two main problems: hate speech and false news. The reason this is a pressing problem is because eventually both these elements end up hurting democracy. At Esya Centre we have taken an in-depth look at the social media ecosystem in India to identify the problems and come up with potential solutions. While India has multiple bills in the works that aim at tackling some of these issues, the ambit of those bills is very broad and encompasses multiple themes. We’ve kept our paper focused on social media and how to moderate user-generated content.

For this paper, which is not sponsored by any social media company, we spoke with a range of companies, lawyers, researchers, and academicians in the ecosystem. We also studied developments in the U.S. and Europe and adapted from there suggestions that we think will help improve the ecosystem in India without killing business. However, this research does not reflect anyone else’s opinions.

Attribution: Megha Bahree, “Moderating Social Media in India: User-Generated Content in an Era of Viral False News, Disinformation and Hate Speech,” Issue No. 006, January 2021, Esya Centre

Embracing Nonlinearity: The Future of India's Entertainment Industry

India’s media and entertainment industries have always been an important part of our national story. As a young nation born in an era where film and radio were in their infancy, we have seen our triumphs and tribulations reflected in the mass media from the very start. These industries have also become important contributors to Indian economic prosperity. In recognition of their importance, the Union government officially designated audiovisual services as one of 12 ‘champion service sectors’ in 2018.

The sector is witnessing change at breakneck speed – developments in technology, notably the internet and over the top (OTT) content have indelibly changed the creation, distribution and consumption of content. The growing OTT ecosystem offers flexibility to creators and consumers, expands choice, and lowers distribution and search costs. Other developments such as strides in artificial intelligence, virtual reality and augmented reality, are opening up new possibilities in entertainment, creating entirely new categories of products. In its response to these changes, India could potentially propel the sector to new heights and make the country a global leader in entertainment.

To frame a suitable response, it is important to imagine what the future of entertainment will be. How will storytelling, which is at the heart of entertainment, change with developments in technology? While stories take many forms – from the oral epics of ancient bards to slick modern video games – their narration and consumption form a central pillar of human existence. Storytelling has evolved with technology, with the flexibility of oral tales yielding to the standardization of print. Today we are on the cusp of another transformation: from linear storytelling in the printed word, television and film, to a more dynamic and nonlinear mode. Artificial intelligence, virtual reality and augmented reality offer new and immersive ways for people to engage with stories. In the future that emerges from current trends, entertainment will become a more dynamic, non-linear and immersive process, highly personalized to fit consumer desires and needs.

We examine the factors that can make India a dominant force in this landscape. The country has three innate strengths we must leverage. Its cultural heritage is ancient and diverse, and remains underrepresented on the world stage. It is also well suited to the nonlinear entertainment of the future, as it contains many traditions of oral storytelling that yield multiple threads from a common recognisable narrative. Third, India is one of the world’s largest consumers of data, with thriving creative industries. Our creators are prolific in terms of output, but lag behind in commercializing their works to generate greater economic value. To achieve this, India can learn from the experience of countries like South Korea, which has emerged as a global entertainment hub.

Certain transformations are urgently required to achieve this outcome. We need to promote creative freedom, which can be done through industry-led standards, as is the practice in countries around the world. This will require active and continued engagement by the industry, as well as recognition and support from the state. Second, we must focus on building our hardware capabilities. The bundling of content with devices is already ubiquitous. And finally, we need to move to a principles-based approach to regulation, which would ensure consistency of purpose across the expanding range of technologies in the media ecosystem.

Attribution: Shekhar Kapur, Vani Tripathi Tikoo, Akshat Agarwal, and Vivan Sharan, “Embracing Nonlinearity: The Future of India’s Entertainment Industry,” Issue No. 005, November 2020, Esya Centre.

History of TV Broadcasting Regulation in India

According to the Broadcast Audience Research Council over 197 million Indian households had a television connection in 2019.1 As of July 31, 2020 the Union Ministry of Information and Broadcasting (MIB) had permitted 920 TV channels to operate. The television broadcast ecosystem has three stakeholders: broadcasters, distributors, and consumers. Broadcasters make content for TV and distributors provide it to consumers using one of four technologies: cable, direct to home (DTH), head-end in the sky (HITS) or internet protocol (IPTV).

A complex web of actors regulates the broadcast ecosystem in India, including the MIB, TRAI the Telecommunications Regulatory Authority of India, and self-regulatory bodies such as the Broadcasting Content Complaints Council and the News Broadcasting Standards Authority. The Department of Space and the Department of Telecommunications’ Wireless and Programming Coordination Wing regulate the use of satellites and spectrum.

The Telegraph Act 1885 and the Indian Wireless Telegraphy Act of 1933 require broadcasters and distributors to register their service. The Cable TV Network (Regulation) Act of 1995 (CTN Act) formalized this registration. At the last mile, local cable operators register with post offices in their territory. State governments have empowered Monitoring Committees at the state and district levels to enforce provisions of the CTN Act– mainly its programme and advertising codes.

Since 2004 the broadcast sector has been regulated by TRAI. The central government expanded the Authority’s powers in 2011 through an amendment to the CTN Act, which together with a 2004 notification from the erstwhile Union Ministry of Communications and Information Technology empowers TRAI to regulate tariffs, including the MRP of channels, the terms of interconnection between broadcasters and distributors, and standards for quality of service at the consumer end.

TRAI’s legacy in the broadcasting sector is one of excessive economic regulation and restrictive price controls. Having expanded its regulatory remit over broadcasting the State did not enhance expertise or capacity, within TRAI or the quasi-judicial Telecom Dispute Settlement Appellate Tribunal (TDSAT). The result has been formulaic, TRP driven television content, and higher costs for subscribers3 and there is no mechanism to enforce quality of service at the last mile.

Since the CTN Act in 1995, Parliament has thrice considered a specialised regulator for the broadcasting sector. On numerous occasions Parliament and specialised committees such as the Nariman Committee have backed the proposal for a specialised regulator, and seminal judicial pronouncements including the ‘Airwaves Judgment’ have highlighted the need for a specific law and a specialised regulator for the sector. Despite these efforts TRAI continues to regulate the broadcast sector, although its oversight was meant to be temporary. This brief explores the history of attempts to introduce a parallel regulatory regime for broadcasting in India, which may help explain why governments have always preferred to expand TRAI’s powers rather than establish a specialised regulator for broadcasting.

Attribution: Varun Ramdas, “History of TV Broadcasting Regulations in India,” Policy Brief No. 204, Oct. 2020, Esya Centre.

Modernising Collective Copyright Management in India

This brief explores the reform of collective copyright management in India. Section 1 sets out the current landscape while Section 2 describes the models of collective management used in other jurisdictions – Brazil, the Nordic countries, the European Union, the United Kingdom, and the United States – and also details some digital solutions. Section 3 concludes with takeaways for India and recommendations for reform – including legislative and administrative reform, structural reform in copyright societies, and increased transparency. Ultimately, the effective functioning of any collective management system will require implementing the Copyright Act’s mandates for CMOs, and ensuring the efficient functioning of administrative bodies in the copyright ecosystem, for effective redressal. While the Copyright Act does provide some safeguards, as discussed, there is ambiguity in the text on its applicability to various organisations. Therefore, there is an urgent need to amend the Copyright Act, reform the functioning of the Intellectual Property Appellate Board, and streamline enforcement mechanisms.

Attribution: Aishwarya Giridhar, “Modernising Collective Copyright Management in India,” Policy Brief No. 203, Oct. 2020, Esya Centre

Nine Principles for India's Digital Economy

Global mobile data traffic was around 456 exabytes in 2019, of which India accounted for around 75 exabytes or around 16 percent, according to Ericsson. Around 14 percent of the global population resides in India and, consequently, the country punches slightly above its weight in terms of mobile data consumption. The size of India’s opportunity to unlock value through such consumption, is perhaps without parallel in the developing world. This can be achieved through a principles-based framework for governance of information technology (IT). The nine principles detailed in this brief can also aid the design of a new-age IT legislation, that fosters innovation, competition and growth:

Principle 1: Legal Recognition

Provide adequate legal recognition and clarity to new digital businesses

Principle 2: Level Playing Field

Level the playing field for small digital businesses and entrepreneurs to compete effectively, through

deregulation

Principle 3: Risk-Based Regulation

Encourage regulations that are activity-specific and prioritise consumer welfare over state control

Principle 4: Functional Classification of Intermediaries through Co-Regulatory Model

Leverage coregulation to help digital intermediaries evolve, innovate and scale

Principle 5: Transparent and Accountable Self-Regulation

Employ self-regulatory and co-regulatory bodies to offset the need for legacy regulatory constructs.

Principle 6: Platform Neutrality

Ensure that large businesses do not discriminate between equal business partners, and consequently reduce the probabilities of gatekeeping.

Principle 7: Privacy and Security by Design

Promote product and platform design that helps local companies access global markets with low compliance costs.

Principle 8: Fair, Reasonable and Non-Discriminatory

(FRAND) Terms Guide business conduct through the FRAND principle, to minimise the need for economic regulation.

Principle 9: Trust and the Global Internet

Promote the use of standards and protocols that build trust in the internet and leverage the wealth of Indian experience in multi-stakeholder collaboration and open design.

Attribution: “Nine Principles for India’s Digital Economy” Special Report, September 2020, Digital India Foundation and Esya Centre.

Response to the Report by the Committee of Experts on Non-personal Data Governance Framework

We at the Esya Centre are grateful for the opportunity given to us by the Ministry of Electronics and Information Technology (MeitY) to respond to the Committee of Expert’s Report on Non-Personal Data Governance Framework (Report). We appreciate that the Committee has attempted to set out a broad framework that seeks to regulate several facets of the use of Non-Personal Data (NPD) while identifying possible areas of concern. In our suggestions, we engage with the Committee’s key recommendations and identify areas which require greater clarity. We recommend actions that assist in creating effective regulation geared towards achieving defined goals and outcomes. Part I contains the summary of recommendations, and Part II contains detailed analysis of the Report. We have structured our responses into 4 sections on Competition and Innovation, Ownership and Access, Privacy and Definitions, and the Regulatory Framework. Within each section, we analyse the key recommendations made by the Committee and propose alternatives. We have sought to engage with the Committee’s recommendations on a first-principles basis and highlight areas which require greater conceptual clarity.

E-Retail, Consumer Demand and the Road to Recovery

I. Demand and E-Retail

The Covid-19 pandemic and ensuing emergency responses across the world are expected to affect firms through supply chain disruptions in the short run and demand declines in the longer run. Given the high share of Micro, Small and Medium Enterprises (MSMEs) as well as the low income of households in India, the country is at risk of a protracted economic downturn, especially given the steady decline in GDP growth.

India needs a two-pronged approach to generate aggregate demand. First, to bring jobs and income back to poorer households, especially for the rural population. Second, to facilitate spending by households who have the willingness and capacity to pay, primarily in and around urban areas. This can be done by facilitating e-retail, which has been a preferred channel during this period. With the element of experience removed from physical shopping, we see a shift in the playing field between online retail and physical stores. E-retail is also more capable of complying with evolving government regulations such as distancing norms, making it both a safe and competitively priced channel to help meet consumer demand.

E-retail regulation in India has a chequered past. For instance, the Government of India’s Draft e-Commerce Policy, which envisions e-retail as a segment within e-commerce, looks to regulate aspects ranging from data and digital infrastructure development to export promotion. It is essential that any future policy on e-commerce should support and incentivise technology adoption and sectoral transitions, such as from offline to e-retail.

II. Restrictions on E-Retail during the Lockdown

A survey of more than 2,000 online sellers conducted between April 27 and May 4 indicates the need for a facilitative policy direction. We find that most firms selling online prefer this channel to offline selling, but faced problems primarily of supply and demand during the lockdown period. A shortage of manpower was another important factor in this period, especially for firms that were previously operating at a larger scale.

Policy also played a role in hindering the operation of e-retail during the lockdown. A great deal of confusion was caused by unclear phrases and terms, for instance the definition of ‘essential goods’ was left unclear.  There was further a degree of inconsistency and differentiation in policy formulation. The adoption of differing standards for online and offline retail during the pandemic, despite the benefits of e-retail such as contactless delivery, is of particular concern.

The lockdown had a substantial impact on retailer supply chains, both online and offline. The initial impact seems to have derived from the lockdown’s sudden nature, and the resulting administrative confusion regarding passes, curfews, and freedom of movement. Businesses operating in multiple states or districts faced a significant challenge in obtaining the necessary permissions for their staff. Later in the lockdown they faced a shortage of labour as several migrant workers had shifted back to their villages or towns.

III. Road to Recovery

Actions by state governments will play a critical role in determining how well small retailers are able to recover. A rapid recovery will require cohesion and collaboration between governments at centre and state. With this in mind a five-step recovery process is suggested in our report.

The first steps are aimed at building trust and confidence in the policy-making process. We suggest that governments at various levels engage with different stakeholders to understand their concerns. Authorities should frame rules on the basis of feedback obtained in such consultation, and the principles of non-discrimination and non-arbitrariness. This will facilitate a level playing field that allows retail market participants to leverage their strengths and explore synergies between the digital and traditional channels.

Authorities must also review the crisis management playbook, including the legislative framework, keeping in mind lessons from the pandemic. A framework governing e-retail, or e-commerce more broadly, can take inspiration from the sectoral development bodies in Malaysia and Singapore, which have enabled local businesses to scale and compete globally.

Attribution: Dr. Megha Patnaik and Mohit Chawdhry. “E-Retail, Consumer Demand and the Road to Recovery,” Report No. 004, September 2020, Esya Centre.

Compulsory Licensing for Radio-Play Of Music in India: Recent History and Economic Context

Compulsory licensing of sound recordings is practiced in different countries, though the trajectories and rationale for arriving at this framework may differ. Developing countries often introduce measures to protect “infant” industries, but policy persistence can make subsequent changes hard. In 2010, the Copyright Board of India passed an order prescribing 2% of net advertising revenues to be paid by radio stations as compulsory license fees to copyright owners, citing the infancy of the private radio industry and the lack of access to music in India. Since the original order, the private radio industry has matured in size, coverage and listenership. Access to music today is facilitated through a far-reaching radio network, as well as widespread mobile and internet usage. The original order will be reviewed in September 2020.

The immediate issues that arise from this order include lack of clarity who the order applies to, a potentially short-sighted approach through subsidizing the radio industry at the cost of the underlying music industry, and a long lock-in period that fixes the rate despite advancements in broadcasting technologies. The radio industry has grown in revenue at an annual average of 15.6% over the past decade. Companies have expanded into new distribution platforms and revenue sources such as online platforms and YouTube, and can be expected to benefit from digital transmission, which allows multiple stations to be broadcast on a single frequency.

With a large number of private and public radio stations that together cover 92% of India geographically and 99% of the population, access through radio has arguably been achieved. In addition, consumer surveys show listeners have affordable access to music via the internet on smartphones.

Given the advancements since the original order, the main recommendation of this paper in the review by the IPAB that is coming up in September 2020 is to aim to determine the fair market value for music in the Indian market and try to achieve the “efficient” outcome. These cannot be currently determined due to lack of data in the public domain, but the regulator can calculate this with data requested from the radio broadcasters and applying strategies described in the past literature for countries with mature markets. Any positive or negative spillovers from the radio industry in terms in of exposure and substitution as well as on the diversity of content can be then be incorporated to adjust the initial allocations.

Attribution: Review of Economic Research on Copyright Issues, 2020, vol. 17(1), pp. 60-77

Note: This paper, published in the RERCI, is shared here with the author’s permission, who is a Fellow at the Esya Centre. It is not a co-publication.

COVID-19 and India’s Media and Entertainment Sector: Recommendations for Recovery

The Reserve Bank of India (RBI) expects negative economic growth this year. The slowdown has adversely affected production and distribution across most industries, and will likely hit markets fuelled by discretionary spending the hardest. These include the Media and Entertainment (M&E) sector— comprising TV, radio, print and digital media, as well as Over the Top (OTT) platforms for audio and video streaming—which is expected to see an “L-shaped recovery”.

In April 2020, the Observer Research Foundation (ORF) and the Esya Centre organised a roundtable to identify the M&E sector’s challenges, emergent trends, and potential pathways to recovery. The discussion was framed using the triad of (a) policy and regulatory environment; (b) future of work and of production; and (c) the imperative of value preservation, with a focus on achieving consensus on remedial action. The key government ministries and regulators that were discussed include the Ministry of Information and Broadcasting (MIB), which plays a central role in the M&E sector. Other relevant nodes include the Ministry of Finance, the Reserve Bank of India (RBI), and the Telecom Regulatory Authority of India (TRAI).

This special report builds on the insights shared during the ORF-Esya Centre roundtable. The following were the key themes that emerged from the discussion:

i. The M&E sector must offset growth slowdown through investments in production efficiency, human capital, and innovation.

ii. The Government must provide a level playing field to functionally similar industries, by deregulating traditional industries like TV, radio, and print, and allow them to compete with digital counterparts through value for money services, product differentiation, enhancements in consumer experience, and choice.

iii. The Government must enable digital transformation by increasing economic freedom for traditional M&E businesses to operate, and by easing digital payment frictions and promoting their wide adoption. In addition, the Government must nudge traditional industries towards better quality of service for its own sustenance.

iv. A focus on M&E exports can be leveraged to offset contraction and reallocation in domestic consumer spends. This requires a strategic approach and public-private collaboration to increase export competitiveness. Lessons can be learned from best practices from other jurisdictions.

v. Economic crises lead to a decline in margins across all rungs of the supply chain, and Micro Small and Medium Enterprises (MSMEs) in M&E will be most affected. Consequently, there is a need for industry and government to collaborate in mapping and targeting MSMEs with capacity-building measures to improve firm productivity.

vi. Cable TV households represent low-hanging fruits in terms of expanding high-quality broadband connections. They also represent addressable demand for video content – which accounts for a large share of broadband consumption globally. Resource sharing, and simpler right of way regimes are required.

Attribution: Vivan Sharan and Laetitia Warjri. “COVID-19 and India’s Media and Entertainment Sector: Recommendations for Recovery,” Special Report No. 109, June 2020, Observer Research Foundation and Esya Centre.

Towards a National Broadcasting Policy: For an Industry in Transition

Since the introduction of broadcasting (radio in 1927, which later included TV broadcasting in 1959), the broadcast industry has become a key part of India’s social fabric. For instance, broadcasting has served as a key medium for the government to disseminate information to the masses, and serving as a mirror to society. In terms of monetary value, broadcasting generated revenues of INR 771 billion in 2018, which is projected to increase to INR 994 billion by 2021. It was also estimated by the Media and Entertainment Skills Council (MESC) that the broadcasting industry would have employed 3.1 lakh people by 2017.

Further, as a core avenue of dissemination for India’s creative economy, the broadcasting sector has successfully created synergies with other segments of the creative economy, especially films, where distribution avenues remain limited. For instance, India’s screen density remains abysmal, with eight screens per million people, compared to China’s 16, and US’ 125 screens per million people. Unsurprisingly then, broadcast rights accounted for 21.2 percent of the film industry’s revenues in 2018, and radio remains one of the most important platforms for marketing and promoting new music.

Moreover, broadcasting holds immense value economically, socially and politically, serving as a powerful development tool. As recognised by the World Bank, the power of broadcasting is premised on the “widespread accessibility”, “ease of use” of technologies, and the wide spread of distribution networks. Different countries have sought to regulate broadcasting to realise the emancipatory potential of the sector. Countries such as the US and the UK use economic regulation to remedy market failure, whereas Canada and France intervene to ensure that the broadcasting industry promotes creative expression and local cultures and diversity. The EU, with which India’s policy stance is aligned in several technology-driven areas, is situated in the middle of this spectrum. It endeavours to ensure that high-quality and diverse content is available and ‘findable’, and that the widest possible audience has access to such content.

In India, the broadcasting sector was initially leveraged by the state to facilitate national integration and dissemination of information to the masses. With privatisation and liberalisation, the approach to regulating broadcasting changed to enable access and promote competition. Today, maximising access to broadcasting as a policy objective has been largely addressed, as 197 million households today subscribe to TV, with private radio channels in over 100 cities and the All India Radio (AIR) reaching 99.19 percent of Indians in 23 languages. Moreover, 88 per cent of TV households have now been digitised, enabling access to a wider selection of channels and content, and a better quality of service. However, quality and choice of content remains suboptimal, with homogenised and formulaic content serving a characteristically diverse and heterogeneous populace. As per the latest figures from BARC, the highest number of channels in most languages today fall in the general entertainment content (GEC) genre.

On an average, approximately 52.07% of fictional GEC programming in every language consists of dramas and soaps. On the other hand, programming for other genres like horror, action/thriller, and comedy remains miniscule in comparison. Viewership patterns, on the other hand, indicate higher demand for certain genres, in comparison to the proportion of such programming carried.

This is paradoxical, since there are few other industries which are as strongly driven by consumer preferences as the media industries. Cultural sensibilities, demographic diversity and socio-economic evolution directly and constantly affect the success of content offerings and distribution platforms. Therefore, it is imperative for systemic reforms to incentivise the creation of high-quality content which is accessible to the widest audience possible, and to strengthen the forces of market competition towards delivering a rewarding consumer experience. Policy and regulatory impetus should thus be geared towards maximising consumer welfare, which entails providing consumers with high quality, diverse content at affordable prices.

Evolving Scope of Broadcasting

With the advent of internet-based content services, and the growing adoption of IP-based broadcast transmissions, competition in the content consumption and distribution spaces has improved. The TV and Radio industries are seeking to address related market challenges through network expansion, consolidation and strategic leveraging of digital opportunities. For instance, advertising on TV is being bundled with digital advertising to provide better value to advertisers. Similarly, TV programming is being coupled with a host of interactive services on digital platforms to drive stickiness of linear television. Illustratively, on air programming of television shows like Satyamev Jayate were coupled with engagement campaigns on social media. Consumers are also presented with increased content and service standards through personalized feeds on the digital medium. This is complemented by a wide availability of affordable and niche content on demand. Thus, digital content disruptions have presented opportunities for the broadcast industry to provide more interactive and creative content along with a heightened viewer experience.

Owing to these crossovers with the digital content space, the scope of ‘broadcasting’ has come to be revisited in law and policy frameworks around the world. For instance, Canada is currently awaiting recommendations on a joint review of its broadcasting, radiocommunications and telecommunications regulations. In this regard, a key question for consultation is how broadcasting (encompassing radio and TV services) can remain relevant as part of a broader, shifting, communications landscape.

While the understanding of broadcasting was previously based on analogue transmission of content for reception by the public, the meaning of broadcasting has come to be understood more broadly to include encrypted transmissions through cable and satellite as well. For instance, the Prasar Bharati Act defines broadcasting based on “transmission of electromagnetic waves”, and the intention for reception by the public through relay stations. As such, the understanding of broadcasting has typically taken a conjunctive understanding of the following considerations:

a. Means of transmission (wired or wireless): Where wireless implies transmission through Hertzian/ electromagnetic waves as well as satellite, and wired implies by cable or fibre;

b. Control over the transmission (close or managed versus open communication networks): Where the transmission takes place under the control and responsibility of the broadcasting organisation; and

c. Manner of consumption (one to many, and push based): Where the transmission has been made publicly available for reception by the public, such that transmission signals have been emitted; it is immaterial whether or not they are in fact received by specific members of the public.

Such an understanding of broadcasting has thus typically excluded dissemination of content over computer networks, and where the venue and timing of receiving the transmission is chosen by the consumer. However, such definitions are being revisited with the advent of convergence as transmission protocols, means of access, and the range of services rendered across different media overlap.

Distinguishing Regulation from Policymaking

At the same time, regulation of broadcasting continues to remain a complex issue, even if the scope of the sector has come to broaden through additions to existing definitions. For instance in India, the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007, includes continuous streaming of content in “digital data form on the computer networks”, which may be accessible to single or multiple users. At the same time, content and carriage distinctions remain vital to defining the scope of services regulated, whereby ‘broadcasting content services’, and ‘broadcasting network services are distinctly defined and corresponding obligations tailored specifically.

The distinct rationale for regulation for radio and TV broadcasting stems from such services being reliant on scarce spectrum: as spectrum is a scarce public resource, its use remains licensed by the government so as to fulfill its role as a custodian of this resource. Furthermore, the Supreme Court has also underpinned the use of a teleport, which is only allowed by operators licensed under the Wireless Telegraphy Act as the basis for regulation of broadcasters. Therefore, TV and radio have been tightly regulated -- beginning from complete monopoly of the government to licensed regulation for private broadcasters post liberalisation and privatisation.

In the internet realm, the absence of dependence on scarce spectrum and teleports does away with the need to regulate services in the same manner as TV and radio. Thus, the contemplation of any regulation of digital streaming must account for the specific market failures that need remedy through state intervention. Notably, digital media accounted for only 11.8% of the Media and Entertainment sector in 2018. However, the absence of regulation has facilitated tremendous growth with digital media being the fastest growing segment at 41.9% in 2018, when it reached an estimated 12-15 million households.

Looking Forward

In this evolving context of broadcasting, it will be necessary for policy and regulatory frameworks to be reimagined to reflect the realities of this transition. To this end, government focus must be on:

1. Enabling TV and radio broadcasters to keep pace with their digital counterparts: It is important to liberalise existing regulatory frameworks to ensure they do not hold back investments in a consolidating and evolving business environment; and

2. Facilitating innovation and consumer welfare: Given the nascence of online media markets, any regulation should be tailored to address clearly identified harms, and based on assessments of its impact on innovation and consumer welfare.

At this stage, it is prudent for government to undertake an independent assessment of the country’s broadcasting landscape. Here, relevant considerations are: trends and likely drivers of change; potential for new services and models; sustainability of revenues; the needs and preferences of audiences; consumer behaviour; platform and distribution developments; and, the efficacy of the extant regulatory frameworks. At the same time, the complex of legislative and regulatory frameworks must be harmonised. Illustratively, the Ministry of Information and Broadcasting (MIB) is currently tasked with legislation and policymaking for television, radio, and the press, while the Ministry of Electronics and Information Technology (MEITy) holds the mandate over all matters relating to information technology and the internet. The ambit for telecommunications, including licensing and policymaking for telegraphs, telephones, wireless and data, along with the administration of the Telegraph Act, Wireless Telegraphy Act and the TRAI falls within the Department of Telecommunications (DoT).In this context, it would be prudent for the MIB to establish a National Broadcasting Commission along the lines of the Digital Communications Commission (erstwhile Telecom Commission), which was set up in 1989 to serve as the policy-making wing of the DoT. Such a commission could include technical members from different arms of government, as well as from industry and academia, who can help shape the future of harmonized policymaking for broadcasting.

Attribution: Research Team, “Towards a National Broadcasting Policy: For an Industry in Transition,” Policy Brief No. 201, June 2019, Esya Centre.

Non-Personal Data: Policy and Regulatory Considerations

The past year saw significant developments in India’s data protection landscape. The Personal Data Protection Bill (PDP Bill) was introduced in Parliament in December 2019, and is under consideration by a Joint Parliamentary Committee. It aims to set out the governance framework for personal data and establish a Data Protection Authority for the purpose. Non-personal data, which does not relate to the data of identified individuals, remains outside the ambit of the PDP Bill. The Union Ministry of Information and Technology (MeitY) also constituted a committee under the chairmanship of Kris Gopalakrishnan (Committee) to suggest pathways for the regulation of Non- Personal Data (NPD). In this introductory brief we introduce the concept of NPD, trace related developments, and suggest the contours of subsequent research.

Attribution: Mohit Chawdhry, “Non-Personal Data: Policy and Regulatory Considerations,” Policy Brief No. 202, May 2020, Esya Centre.

Measuring India’s Creative Economy

1. The aim of this study is to provide the first ever measure of the economic contribution of copyright relevant and related rights-relevant industries in India. The copyright-relevant industries are those defined by the World Intellectual Property Organization (WIPO) as “activities or industries where copyright [and related rights] play an identifiable role”.

2. We adopted the methodology put forward in the WIPO (2015) Guide on surveying the economic contribution of copyright-related industries in India, which intends to maximise comparability with previous studies in other countries. We conduct the study for 2016-2017, which is the latest year where most of the required economic indicators are available at WIPO-defined industry categorisations.

3. Our primary data source is the Annual Survey of Industries (ASI) conducted by the Ministry of Statistics and Program Implementation (MOSPI), which gives comprehensive coverage of the manufacturing sector. We also aggregate company-level data from the Prowess database published by the Centre for Monitoring the Indian Economy and use this to supplement the ASI data for industries outside of manufacturing. We include data from industry studies such as the FICCI-KPMG report and the survey by the media and entertainment industry Skills Council (MESC) to cover industries outside of manufacturing. For the exports and imports figures, we use the trade data published by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), which gives a comprehensive value for all goods traded. We supplement the exports and imports figures with trade data from the World Trade Organisation (WTO) on audio-visual services.

4. For the selection of industries to include, we used the WIPO guide. WIPO distinguishes four categories: Core Copyright Industries, Interdependent Copyright Industries, Partial Copyright Industries and Non-Dedicated Support Industries. In 2016-2017, the Core Copyright Industries accounted for 44.74% of the value added generated by Indian copyright-relevant industries. Similar to other countries, the Core Copyright industries have the highest share of value added across all copyright-related industries.

5. The economic contribution of Indian copyright-relevant industries has been measured using three indicators: the Gross Value Added (the value added to goods and services used in the production process), employment, and the balance of trade (exports minus imports). Data is taken for the most recent year available (2016-2017). Table 1 summarises our results.

6. The Gross Value Added (GVA) of copyright-relevant industries amounted to Rs. 888.89 Billion in 2016-2017, or 0.58% of the Indian Gross Domestic Product (GDP)3. The Central Statistical Office reports GVA by 2-digit industries, to which we cannot apply the WIPO methodology. Our calculations cannot include this data, making our overall calculation for GVA an underestimation. The international average from available WIPO studies from varying years is a contribution of 5.48% by mean and 4.83% by median. The share of GVA of creative industries in overall GDP is visibly less for India than that of other countries. This can be partially attributed to the lack of comprehensive GVA data outside of the formal manufacturing sector, but not entirely, as we describe in the next point.

7. As a benchmark, consider the share of creative economy in the partial and interdependent industries, which mainly come under manufacturing. We can compare this to total manufacturing GVA. The share is 2.97% of total manufacturing GVA, which is still lower than median and mean shares to GDP from other countries, globally as well as across Asia.

8. Employment in India’s copyright-relevant industries is approximately 1.1 million workers. The share to total employment cannot be calculated due to the absence of official employment data for 2016- 2017. However, we calculate the share of partial and interdependent industries to total manufacturing employment in a calculation similar to the one for GVA described above using the ASI manufacturing employment data. This gives a share of 2.72% of copyright-related employment in manufacturing. The average share of national employment in other countries equals 5.4%, once again suggesting that the low share of copyright-related industries can only be partially explained by the lack of data.

9. Employment elasticity is high at 0.87 for the set of copyright-relevant industries. The highest elasticity is for the partial copyright industries due to their high labour intensity.

10. Economic contribution was furthermore measured in terms of the trade balance, which equals exports minus imports. Note that this measure captures only goods traded and excludes copyright-related services. We also add in audio-visual services from the FICCI Frames report for 2016 as they are a large component, but data on other services are not available. India is a net exporter in the Core, Partial and Non-Dedicated Copyright industries, while it is a net importer in the Interdependent Copyright industries. Overall, copyright relevant industries had a deficit of USD 16.4 Billion in 2016-2017, while overall India ran a trade deficit. Note that using unweighted data, we would get a trade surplus of USD 34 billion. This divergence is due to several methodological concerns including the absence of trade data on services, the prescribed method for selection of weights, and the detail of HS product code selected.

11. Various methodological and data issues had to be resolved to finalise this study. There are minimal assumptions on industry mappings from the WIPO guide to India’s industry classification, which can often require assumptions for other countries. We make assumptions on assigning shares to narrow industries which overlap with each other, or report their data in an aggregated fashion. We also make simplifying assumptions on the weights or copyright factors, in the absence of firm survey and interview data. For the trade calculations, there is no reliable mapping between industry and product codes, so we matched these by description. Finally, we supplement core datasets with aggregate figures from company reports and industry reports for groups of narrow industries, in the absence of comprehensive data at the narrow industry level that the WIPO methodology requires.

12. For a richer estimate of the size of the copyright economy in India, our recommendation is for government agencies to produce an advanced version of this study. Access to data on GVA at the narrow industry level from the CSO will be necessary to estimating the contribution of copyrightrelated activities accurately. Trade data on services is crucial to capture the copyright economy for India. Estimates of employment from household and small enterprise surveys can be used to capture the informal sector.

13. Several qualitative aspects of the creative economy can also be included for better understanding of the creative economy. Periodic documentation of the copyright-relevant sectors can help understand trends. This study can be considered the first step towards measuring India’s creative economy.

14. The WIPO methodology is more amenable to developed country settings where almost all economic activity takes place in the formal sector. The informal economy remains out of scope in settings such as India. We recommend WIPO consider this in future versions of its guide.

Attribution: Dr. Megha Patnaik. “Measuring India’s Creative Economy,” Report No. 003, May 2020, Esya Centre.

Response to the Consultation Whitepaper on the Strategy for National Open Digital Ecosystems (Node)

We at the Esya Centre greatly appreciate the opportunity given to us by the Ministry of Electronics and Information Technology (MEITy) to respond to the consultation whitepaper on the ‘Strategy for National Open Digital Ecosystems (NODE)’ (Whitepaper), which solicits public comments for developing a comprehensive national strategy on NODE. We appreciate that MEITy has identified design principles to develop a framework for digital governance through the Whitepaper, and that it has also identified key concerns that would need to be accounted for in developing the NODE framework. In answering the questions posed in the Whitepaper, we have focused our feedback on those relating to design principles, governance, and the potential risks of open digital ecosystems. We have approached this analysis from a broad, techno-legal perspective, and focusing on the rights and obligations of various stakeholders. Part I of this response will provide a brief snapshot of our recommendations under the relevant questions, which will thereafter be explored in detail in Part II. We hope that these discussions will prove instructive in a larger discourse about digital governance in India.

Comments on the: Personal Data Protection Bill (PDP Bill), 2019

The copyrightability of databases has been settled by the Supreme Court in Eastern Book Company v. DB Modak. Here, the question was whether the petitioner, a company which created databases of Supreme Court cases (which are in the public domain) could claim copyright protection for their databases. It was held by the Court that the petitioner’s input of independent skill, labour and capital, in editing and arranging the information as well as adding inferences from it in the form of headnotes, resulted in the database being a copyrightable work.

Trends in Copyright Infringement and Enforcement in India

The World Intellectual Property Organisation describes copyright (or author’s right) as the rights that creators have over their literary or artistic works. Works covered by copyright range from books, music, paintings, sculpture, and films to computer programmes, databases, advertisements, maps, and technical drawings. In the first report in the series, we explored the changing role of IP rights globally, shaped by advancements in the digital era. We discussed how copyright has been elevated from being an ‘economic vehicle’ to ‘a communications instrument relevant to cultural policy.’ And how, therefore, copyright laws influence free expression, shape innovations in the digital cultural space, govern information flows, regulate the production and exchange of digital cultural products, and shape social relations of communication. Copyright law gives control to authors and subsequent owners. Thus, writers, artists, musicians, performers, software programmers, publishers, students, researchers, librarians, teachers, readers, movie-goers, and music fans amongst others, exist in a web of cultural and economic relations subject to copyright law. Copyright impacts the information and communication markets as well as culture around the world, its infringement can be seen as both a moral and an economic violation. With the proliferation of the Internet and internet devices, infringement has become seamless and at scale. This report explores the contours of digital copyright piracy and how it affects all kinds of expressions of ideas.

Industry Growth and Piracy

The debate over piracy, and whether it promotes or harms cultural consumption, remains unsettled. The rise of the digital medium for consuming content has added to industry growth but has also aided digital piracy. For instance, online streaming has emerged as the biggest contributor to music consumption. In india, as of December 2018, the value of the audio ott market was USD 250 million, and music consumption per week stood at 21.5 Hours versus a global average of 17.8 Hours..

Using music as a proxy for the content industries would demonstrate the potential of the digital market. Piracy has affected other digital media as well. Illegal streaming reportedly accounted for:

The Indian Context

The Indian creative industry (largely comprising the media and entertainment industry) is poised to be worth USD 31 billion by 20209 and is expected to create 1.3 million jobs by 2022.10 Although the Indian Government has identified the audiovisual sector as a ‘champion services sector’, much remains to be done to protect and promote investment and innovation in India’s creative economy. The growth of an innovative content ecosystem depends on a clear understanding of the market, the legislative and enforcement framework, and piracy’s technological underpinnings.

The first critical step is identifying why piracy takes place, and what makes India a particularly challenging market in this regard. A recent meta-study of the existing literature found that a predisposition towards digital piracy is influenced by several aspects: personality factors (self-control), personal or psychological factors (neutralisation techniques, attitudes and beliefs), and social and cultural factors (social learning, collectivistic/ individualistic factors). Other determinants included legislation, and efforts by industry, the judiciary, and policymakers to curb digital piracy.

The drivers of digital piracy in India specifically remain unaddressed in recent academic literature. There is no recent and reliable data on the total size or scope of the cultural economy in India, nor the scale and nature of copyright infringement. For instance, while WIPO has calculated the revenue, employment and net exports generated by the creative industries in a number of countries, such a study is yet to be conducted for India.

India presents a number of challenges in combating online piracy for multiple reasons: lack of uniform enforcement mechanisms, the fragmentation of supply chains in cultural industries, emerging business models, the rapid development of the OTT space requiring increased technological investments in media encryption and piracy monitoring, an overburdened judicial system lacking in specialised IP courts, and the absence of a widespread understanding of copyright, among other factors. Content owners thus need to additionally invest in media encryption and piracy monitoring services. Local industry continues to be dominated by promoters and family owned companies, therefore, governance structures tend to be informal, making industry organisation and policy advocacy more difficult.

Centralised and uniform enforcement strategies are difficult to implement in India. ‘Law and order’ is a state subject under the Seventh Schedule to the Constitution, so enforcement initiatives that rely on the police are organised at the state level rather than through any centralised agency with national jurisdiction, making it difficult for enforcement strategies to be implemented uniformly throughout.

In conversations with industry experts we discovered some unconventional factors (beyond pricing and availability) that shape the piracy industry in India. For instance, the factor of time or the ‘windowing’ period is critical to controlling piracy. The less time it takes for a theatrical release to find its way to a legal, more accessible digital medium like OTT, the less users’ predisposition to consume pirated content. In this context, a recent report mentioned that due to the threat of digital piracy across and between windows has prompted many TV copyright owners to shorten delays between releases to different segments of the market. In certain cases where there is a high risk of widespread piracy (e.g. the Game of Thrones series), some content suppliers have moved to a day-and-date approach in which material is released simultaneously across differing outlets and platforms worldwide.

Indeed, the use of OTT platforms has emerged as a strong anti-piracy measure, and with local and international content now available at lower prices on various OTT services, the piracy market in India is bound to undergo certain changes, given the variety of content (international and regional) offered by several legal online content platforms at affordable price points.

Method

This report combines desk-based analysis with semistructured interviews and discussions with practitioners and academic experts. It focuses primarily on the media and entertainment industries, given the availability of previously conducted research and data. It is also rooted in current and future trends, a review of global literature, and specific case studies. In its working paper format, the report was valuably informed by a focus group discussion among experts.

Attribution: Dr. Megha Patnaik, Shohini Sengupta and Aishwarya Giridhar. “Trends in Copyright Infringement and Enforcement in India,” Report No. 002, December 2019, Esya Centre.

Associated Videos:

Trends in Copyright Infringement and Enforcement in India

Economic Analysis of Piracy in the Indian Movie and Music Industry

Review of Copyright Legislation in India

Cross-border Copyright Infringement

Key Judicial Trends in Copyright Enforcement

Global Regulatory and Policy Best Practices

Extralegal Strategies and Soft Law Approaches