DIPP calls meeting of stakeholders on tobacco sector foreign investment
New Delhi: The commerce and industry ministry has convened a meeting on April 11 of all stakeholders, including farmer associations, private companies and government departments to deliberate upon issues pertaining to foreign direct investment (FDI) in the tobacco sector.
Currently, FDI is prohibited in manufacturing of cigars, cigarettes and tobacco substitutes. However, it is permitted in technology collaboration in any form, including licensing for franchise, trademark, brand name and management contracts in the tobacco sector.
The meeting assumes significance as the Department of Industrial Policy and Promotion (DIPP), under the ministry, had earlier in 2016 floated a proposal to put a complete ban on FDI in the tobacco segment.
In that proposal, the ministry had proposed to ban FDI in licensing for franchisee, trademark, brand name and management contracts in the sector, which mean FDI would be totally banned in the tobacco segment in any form.
However, the government could not take any decision on the matter due to concerns raised in certain quarters, including tobacco farmers' associations and companies like Godfrey Phillips.