The world's third largest tobacco company by sales volume, Japan Tobacco Inc, has invested $65 million (Rs 293 crore) in its Indian unit without increasing its shareholding, just days ahead of a government decision to ban foreign direct investment in cigarette manufacturing.
Global tobacco majors Philip Morris International and Japan Tobacco International on Friday deplored as "discriminatory," the Indian government's decision to ban foreign investment in cigarettes.
Foreign cigarette companies could soon find it harder to sell their products in India. The government is looking into a proposal to ban foreign direct investment (FDI) in the wholesale marketing arms of these companies. It is also exploring the possibility of shifting the import of tobacco products from the open general licence (OGL) to the restricted list.
India currently allows up to 100 per cent FDI in this sector, but the health ministry has moved a draft note for the cabinet to ban foreign investment in this sector
The health ministry plans to oppose the application from Japan Tobacco International Ltd, the world's third largest tobacco company, to the Foreign Investment Promotion Board to raise its stake in its Indian venture from 50 to 74 per cent. The application is slated for consideration in the FIPB meeting on Tuesday.
To take the Rs 49,000 crore ITC to the top slot in the highly competitive FMCG business will require some aggression.
The 30-share Sensex ended down 71 points at 26,710 and the 50-share Nifty lost 38 points to close at 8,030.
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