Government prohibits FDI in cigarette manufacturing

The Cabinet Committee on Economic Affairs (CCEA) today approved a proposal of the department of industrial policy and promotion to prohibit foreign direct investment (FDI) in manufacturing of cigarettes and to include the activity in the list of activities prohibited for FDI.

The present policy permits FDI up to 100 per cent, with prior government /Foreign Investment Promotion Board (FIPB) approval, in the manufacture of cigarettes, subject to the undertaking obtaining an industrial licence under the Industrial (Development & Regulation) Act, 1951.

The move is expected to enhance public accountability by way of the government's commitment towards proliferation of anti-smoking regime in the country.

This would bring the policy in line with the administrative decision not to grant industrial licence for cigarette manufacturing. It will also align the FDI policy with the existing legislation on tobacco control to a greater extent, a government release said.