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Godfrey Phillips says it is in complete compliance with India's FDI norms

As per reports, Philip Morris for years has paid manufacturing costs to Godfrey Phillips to make its Marlboro cigarettes and circumventing the FDI norms

Press Trust of India  |  New Delhi 

FDI
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maker Monday said it is in complete compliance with the country's FDI norms and rejected allegations of violations regarding its arrangements for cigarettes.

Godfrey Phillips has an exclusive procurement and supply agreement with Philip Morris International to manufacture and distribute in the country.

As per media reports, Philip Morris for years has paid costs to Godfrey Phillips to make its cigarettes and circumventing the FDI norms.

"The suggestion of alleged violation of FDI laws of is completely misconceived and misplaced," said in a regulatory filing.

The company was clarifying over various suggesting alleged violation of FDI norms in the arrangement to manufacture Marlboro cigarettes in India.

The company said it had entered into a commercial arrangement with (an Indian entity and affiliate of Philip Morris International Inc, USA) to manufacture Marlboro cigarettes in India in May 2009, a year before May 2010 when the restrictions on FDI in manufacture of cigarettes came into being.

"The commercial arrangement referred to above is in complete compliance with the extant regulations governing the FDI laws in India.

"All the business transactions entered and executed between the parties since 2009 are governed by the above referred commercial arrangement," the company said, adding that all the business transactions in this regard are executed in Indian rupees.

Currently, FDI is prohibited in of cigars, cigarettes and substitutes. However, it is permitted in in any form, including licensing for franchise, trademark, brand name and management contracts in the sector.

Shares of settled 9.62 per cent higher at Rs 1,032.60 apiece on BSE.

First Published: Mon, March 11 2019. 19:15 IST
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