The government has notified the ban on FDI in cigarette manufacturing, a decision taken by the Union Cabinet on April 8.
“Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes” have been put under the list of sectors where FDI is prohibited.
The Department of Industrial Policy and Promotion made changes in the Consolidated FDI Policy, dated March 31, to prohibit foreign investment in the sector.
The Centre took the decision to enhance public accountability towards proliferation of the anti-smoking regime in the country.
The decision to ban FDI is the latest in the government’s long-standing drive against smoking. In 2008, the government had banned smoking at public places and put a curb on tobacco advertisements.
The proposal was mooted by the DIPP and approved by the Cabinet Committee on Economic Affairs (CCEA).
Earlier, 100 per cent FDI was permitted in cigarette manufacturing, but an industrial licence was needed and the proposals required to be approved by the Foreign Investment Promotion Board (FIPB).
The government had stopped granting industrial licences for cigarette manufacturing.
Global tobacco majors Philip Morris International and Japan Tobacco International had deplored as “discriminatory,” the government’s decision to ban FDI in cigarettes.