FDI in tobacco: DIPP meets stakeholders; participants shared mixed views

FDI in tobacco: DIPP meets stakeholders; participants shared mixed views

Farmer associations and industry today shared mixed views in a meeting called by the commerce and industry ministry on issues related to foreign direct investment (FDI) in the tobacco sector. 

The meeting was chaired Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek here. 

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

Krishan Kumar Modi, Chairman, Modi Enterprises said the current FDI policy in the sector should continue without any change. 

"There is no need to bring (FDI) restrictions because other countries will also put restrictions and we are a major exporter of products such as cigarettes," he said after the meeting. 

Modi added that a level paying field should remain for both domestic and foreign players in the country. 

"Most of the large companies of the world are already here. So, if you ban few more that is not going to change the ground reality but on the other hand it will perpetuate monopoly," he said. 

He said that not much FDI has come into the sector as no new license to manufacture are being given. 

Representative of Peridepi Tobacco Farmer Society Yashwanth K C said FDI should not be banned in the sector as new technologies would help in getting remunerative prices to farmers. 

"We are for FDI. We invite the technologies because for farmers. Markets have stagnated for so many years. It is also occupied by limited players and they have exclusive control over commodity and the trade. 

"Entry of multinational firms in the sector here would provide a level playing field. If we have multiple players, there will be more competition and farmers will get multiple choices," he told.

However, Federation of All India Farmer Associations (FAIFA) and Karnataka Tobacco Growers Forum (KTGF) strongly opposed FDI in the sector. 


By BOA Bureau