Key Ministries to review FDI policy in tobacco sector
Senior officials of Ministries of Health, Commerce and Industry, and Finance will meet on Friday to discuss and review the foreign direct investment (FDI) policy in the tobacco sector. They are expected to deliberate on whether foreign investment in tobacco sector should be prohibited or not.
Health factor
The current policy allows 100 per cent FDI in cigar and cigarettes manufacture on a case to case basis, but there has been a growing opposition against encouraging investments including FDI into the sector. In the past, the Health Ministry has taken a clear position that no FDI be permitted in the tobacco sector.
Earlier when the Foreign Investment Promotion Board (FIPB) was deliberating on a proposal by JT International Mauritius and JT International Holding to hike foreign shareholding in JT International India to 74 per cent (from 50 per cent), the Health Ministry had told FIPB that in view of the public health policy it does not favour further growth of the tobacco industry, in the country.
The JTIL proposal came up in the FIPB meetings in July 2008 and October 2008 and again on January 2009 but a decision on the same was deferred. On January 9, 2009, Department of Industrial Policy and Promotion (DIPP) sought deferment of the application saying it needed more time to finalise FDI policy on tobacco sector.
Copyright © 2009 Thehindubusinessline
