In 2008, the government had banned smoking at public places and put a curb on tobacco advertisements
Taking its anti-smoking drive forward, the government today banned foreign direct investment (FDI) in cigarette manufacturing in the country.
Home minister P Chidambaram said that FDI will be prohibited in cigarette manufacturing, whether it is for domestic consumption or for exports.
“The approval is expected to enhance public accountability by way of the government’s commitment towards proliferation of (the) anti-smoking regime in the country,” he told reporters after the CCEA meeting.
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 for banning FDI in cigarette manufacturing was mooted by the Department of Industrial Policy and Promotion and approved by the Cabinet Committee on Economic Affairs (CCEA) in its meeting.
“Prohibit FDI in manufacturing of cigarettes and to include the activity in the list of activities prohibited for FDI,” the official release said.
When asked about the existing foreign investment in the tobacco sector, Mr Chidambaram said the matter did not come up for discussion in the CCEA.
Under the existing norms, 100% FDI is permitted in cigarette manufacturing, but an industrial licence is required and the proposals need to be approved by the Foreign Investment Promotion Board (FIPB).
With the CCEA banning foreign inflows, Mr Chidambaram said, “This would bring the policy in line with the administrative decision not to grant industrial licence for cigarette manufacturing.”
The move would also align FDI policy with the existing legislation on tobacco control to a greater extent, the minister said.