Decision on FDI ban in tobacco products likely tomorrow

The government is expected to take a decision tomorrow on the proposal to ban foreign direct investment (FDI) in tobacco products, including cigarette manufacturing.

The proposal was mooted by the Department of Industrial Policy and Promotion (DIPP) with the support of the health ministry, sources said.

The proposal is likely to come up in the Cabinet meeting tomorrow, they added.

Commerce and Industry Minister Anand Sharma recently said there was no justification for FDI in the tobacco sector. "Why should we have FDI in tobacco? There is a ban on smoking in public places. We are a responsible country," Sharma had said.

Currently, 100 per cent FDI is permitted in the sector. But an industrial licence is required and the proposals need to be approved by the Foreign Investment Promotion Board (FIPB).

India, a signatory to the World Health Organisation- sponsored Framework Convention on Tobacco Control, is committed to bringing down tobacco cultivation and consumption in the country.

However, the policy change would only ban fresh inflows and not impact existing tobacco companies with foreign investment.