A proposal by tobacco giant Japan Tobacco Inc to raise its equity in its Indian joint venture has kicked off a major controversy with the country’s largest tobacco company ITC Ltd and the health ministry opposing the move and the Prime Minister’s Office being impelled to intervene.
In June this year JTI submitted a proposal to the Foreign Investment Promotion Board to raise its stake in JT International (India) Ltd, which makes the Camel and Winston cigarette brands, from 50 to 74 per cent.
The proposal was endorsed by the ministry of commerce and industry, which argued the policy allowed 100 per cent Foreign Direct Investment in the sector subject to industrial licensing and the proposal was not for fresh capacity for cigarette manufacturing.
Meanwhile, the PMO, in a series of letters in July and August, has directed the department of commerce and industry to take action on points raised by the Tobacco Growers Welfare Association of Guntur, which has opposed the increase in FDI, and also instructed the Department of Economic Affairs to give its comments on a petition by the Tobacco Institute of India, which represents the interests of domestic tobacco companies and also opposed the JTI proposal.
The PMO has also directed the DEA to take the opinions of the health ministry and the department of revenue on the contentious issue.
Text: Surajeet Das Gupta
Image: Sushma Swaraj (C) with schoolchildren | Photograph: Raveendran/AFP/Getty Images
Also read: Reliance to supply 40% of India's gas, oil!
Powered by 
Advertisement
