Govt bans FDI in cigarette manufacturing

New Delhi, Apr 8 (PTI) Taking its anti-smoking drive
forward, the Indian government Thursday banned foreign direct
investment (FDI) in cigarette manufacturing in the country.
India's Home Minister P Chidambaram said that FDI will be
prohibited in cigarette manufacturing, whether it is for
domestic consumption or for exports.
"The approval is expected to enhance public
accountability by way of the government's commitment towards
proliferation of anti-smoking regime in the country," he told
reporters after the CCEA meeting.
The decision to ban FDI is the latest in the government's
long-standing drive against smoking.
In 2008, the government had banned smoking at public
places and put a curb on tobacco advertisements.
The proposal for banning FDI in cigarette manufacturing
was mooted by the Department of Industrial Policy and
Promotion and approved by the Cabinet Committee on Economic
Affairs (CCEA) in its meeting.
"Prohibit FDI in manufacturing of cigarettes and to
include the activity in the list of activities prohibited for
FDI," the official release said.
When asked about the existing foreign investment in the
tobacco sector, Chidambaram said the matter did not come up
for discussion in the CCEA.
Under the existing norms, 100 per cent FDI is permitted
in cigarette manufacturing, but an industrial licence is
required and the proposals need to be approved by the Foreign
Investment Promotion Board (FIPB).
With the CCEA banning foreign inflows, Chidambaram said
"this would bring the policy in line with the administrative
decision not to grant industrial licence for cigarette
manufacturing."
The move would also align FDI policy with the existing
legislation on tobacco control to a greater extent, the
minister said. PTI RR
MRD