New Delhi: The government is reviewing foreign direct investment policy for cigarettes, which has come under the lens of the Health Ministry seeking a ban on foreign investment in tobacco products.
The Department of Industrial Policy and Promotion has started the process of inter-ministerial consultations for change in the FDI policy for cigarettes.
“FDI policy for cigarettes is in the process of review through inter-ministerial consultations,” an official said.
Currently, 100% FDI is permitted subject to companies manufacturing cigars and cigarettes of tobacco and manufactured tobacco substitutes.
However, an industrial licence is required under the Industries (Development and Regulation) Act, 1951. The proposals also need approval from the Foreign Investment Promotion Board (FIPB).
Pending the policy review, the government has deferred the proposal from the Japan Tobacco International Ltd (JTIL), makers of popular Camel and Winston cigarette brands, to raise its stake in its Indian arm.
JTIL had globally acquired R J Reynolds which had a 50:50 joint venture with Modis-controlled Godfrey Phillips.
Health Minister Anbumani Ramdoss has been running a public campaign against smoking, banning it at public places. The ministry is opposed to promotion of tobacco products through foreign investment.
The issue also came up in parliament recently, when it was questioned in why public institutions like LIC has invested money in tobacco companies such as ITC, to which the government replied such investments are of financial nature.