Global Trade Alert

The Department of Industrial Policy & Promotion (DIPP), the nodal department for framing the FDI policy, on issued on 10 May 2010 a notification banning foreign direct investment in manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes. These products have been included in the list activities/sectors prohibited for FDI. The DIPP issued amendments to this effect in the consolidated FDI policy.
 
A ban on FDI in manufacturing of cigarettes will affect existing foreign players' future investment plans in the country. However, it will not affect their existing investments in Indian ventures. At present, three major global players - British American Tobacco (BAT), Japan Tobacco and the Altria Group - have large investments in India.