INDIA
Farmer associations and industry figures shared mixed views on issues related to foreign direct investment (FDI) in the tobacco sector in a meeting called by the commerce and industry ministry, chaired by Ramesh Abhishek, secretary of the department of industrial policy and promotion (DIPP).
FDI is currently prohibited in the 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 of 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. Modi also said a level playing field should remain for both domestic and foreign players in the country, and that not much FDI has come into the sector as no new licenses to manufacture are being given.
The Federation of All India Farmer Associations (FAIFA) and Karnataka Tobacco Growers Forum (KTGF) also strongly oppose FDI in the sector, instead wanting complete prohibition of foreign investment in the segment. “We have modern technologies and we do not want any kind of FDI in the sector,” said FAIFA president, B. V. Javare Gowda.
On the other hand, Yashwanth K.C., representative of Peridepi Tobacco Farmer Society, 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 said.