FDI in tobacco sector

Q.  Which of the following is/are true?

1) At present there is a complete ban on FDI in Tobacco sector.
2) Being a profitable industry, government is planning to relax norms of FDI in the tobacco sector.
- Published on 04 May 16

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2

ANSWER: Neither 1 nor 2
 
  • At present, FDI is permitted in technology collaboration in any form, including licensing for franchise, trademark, brand name and management contract in the tobacco sector.
  • However, it is prohibited in manufacturing of cigars, cigarettes of tobacco and tobacco substitutes.
  • After making it mandatory to carry larger pictorial warnings on cigarette packets, the government is now working on a proposal to completely ban foreign direct investment (FDI) in the tobacco sector.
  • The move also assumes significance as India is signatory to the Framework Convention on Tobacco Control, under which it has the responsibility of reducing consumption of tobacco products.

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