India's private FM radio industry is at a critical juncture, with operators warning that without urgent government reforms, the sector could shrink irreversibly. The industry faces multiple headwinds: a ban on broadcasting news, high taxation, regulatory burdens, and fierce competition from digital audio platforms like podcasts and streaming services.
HT Media Surrenders Licences; Five Stations Go Off Air
The crisis became tangible last month when HT Media announced it would surrender multiple FM radio licences in key markets. Consequently, five of its stations went off air on June 15. This move underscores the financial strain on broadcasters, who argue that the current regulatory environment makes the business unsustainable.
According to the Association of Radio Operators for India (AROI), radio is now the only segment of India's media and entertainment industry that is shrinking. While the overall sector grew 9 per cent to Rs 2.78 lakh crore in 2025, radio revenues declined 7 per cent to around Rs 2,300 crore. The industry's share of advertising spending has fallen sharply, from over 3.4 per cent in 2015 to about 1.1 per cent in 2025. Private FM industry revenues in 2025 stood at around Rs 1,819 crore, still below 2020 levels despite an increase in the number of operational stations.
Four Key Demands: News, Tax, Phones, Licence Fee
The industry has outlined four primary demands to revive the sector. First, private FM stations seek permission to broadcast news and current affairs, a privilege currently exclusive to All India Radio. Second, they want GST on radio services reduced from 18 per cent to 5 per cent. Third, they urge the government to mandate that smartphone manufacturers unlock FM receivers in devices. Fourth, they propose a licence fee model based on a fixed percentage of actual earnings, rather than charges linked to historical auction prices.
Nisha Narayanan, Director and COO of Red FM, told PTI: "The global shift towards on-demand audio is undeniable and well documented. But the real question is whether the FM industry is being given a fair regulatory environment to compete, innovate and monetise effectively while making the transition." She added that the industry did not anticipate "the compound effect of several severe headwinds converging at once." At Red FM, government advertising volumes have declined by more than 30 per cent and revenues from that segment have fallen 27 per cent compared with pre-pandemic levels.
Government Acknowledges Technological Shift
Union Minister of Information and Broadcasting Ashwini Vaishnaw acknowledged the challenges, attributing them to a broader technological transformation. "It's a major technological change which is happening and we are all aware of how ... whether it is news industry whether it is entertainment ... the entire shift towards digital has happened consistently over the last few years and this is a very big challenge for the FM industry," he said. He drew parallels with the decline of landlines after mobile phones and the shift from conventional vehicles to electric vehicles.
On the demand to allow private FM stations to broadcast news, Vaishnaw said the government was examining the issue. "This is a demand from FM stations, FM service providers which have come to us. We are deliberating on it. It has multiple consequences because we have had a history which needs to be seen today and whatever we decide today has to be seen in the perspective that this industry has developed. Very soon we will be taking some decisions on it," he said.
News Ban: A Costly Missed Opportunity
Industry leaders argue that the prohibition on independent news broadcasts is one of the most damaging regulations. Radio City CEO Abe Thomas stated: "The news ban has been one of FM's most costly missed opportunities. News drives habitual listening, deepens community engagement and unlocks new revenue categories." He noted that countries like the United States, United Kingdom, Australia, and the Philippines have successfully integrated news and talk programming into radio, helping maintain relevance in the streaming era.
Broadcasters believe that hyperlocal news, civic information, and community discussions could distinguish FM radio from music streaming services. However, the draft Telecommunications (Television, Radio and Associated Services) Rules, 2026, made public on June 12, continues the existing restriction on broadcasting news.
Licensing Structure and Financial Burden
Another major challenge is the licensing structure. License extension fees linked to historical auction prices impose a disproportionate burden on operators. Broadcasters are seeking automatic licence extensions for existing operators rather than fresh auctions. Narayanan highlighted the uncertainty: "The current batch of FM licences comes up for renewal in 2030 and that is not far away. With no clarity whatsoever on the renewal framework, pricing or TRAI recommendations, it's extremely tough for operators to make long-term investments."
According to industry estimates, nearly 40 per cent of gross revenue is consumed by GST, licence fees, and spectrum-related charges. The sector paid nearly Rs 999 crore to the government in FY26, while the 18 per cent GST rate places radio at a disadvantage compared with other media segments taxed at 5 per cent.
Smartphone FM Chip Activation
The demand to unlock FM receivers on smartphones is longstanding. Broadcasters say FM chips exist in many devices but are often disabled, forcing listeners to use internet-based streaming. Narayanan called it a simple policy nudge: "Activating them requires a software unlock, not a new component. This is not market intervention, it is a simple policy nudge."
Public Service Value and Last-Mile Access
Despite the challenges, FM radio remains a critical public service medium, especially in a country with uneven internet access. Narayanan noted: "There are over 40 crore daily listeners across AIR, private FM and community radio in India. Radio provides last-mile access that no streaming platform can match. It works without internet, without subscriptions and on battery-powered devices during power cuts and emergencies."
Thomas agreed: "FM remains the most resilient medium during disasters and network outages -- in a country as large and diverse as India, that carries genuine public-interest value."
Future Outlook: Integration or Decline
Industry leaders are divided between concern and optimism. Thomas said the term 'radio company' itself is becoming obsolete, as consumers do not distinguish between FM, podcasts, or streaming. Future growth, he believes, will come from building integrated ecosystems spanning broadcast, digital content, branded entertainment, live experiences, and regional storytelling.
Without reforms, however, executives warn of significant contraction. Narayanan cautioned: "If nothing changes in the next two to three years... smaller operators will exit markets, deeply local stations will simply go dark and what survives will be leaner, more urban-focused and far less representative of the diversity of voices FM radio was meant to carry."
