Report by the Secretariat: II. Trade Policy Regime: Framework and Objectives: (4) Investment regime: Paras. 27, 39, and Table II.8:
What is the relationship between the total ban of FDI in the manufacture of "cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitute" and the compulsory requirement for industrial licensing in "Cigars and cigarettes of tobacco, and manufactured tobacco substitutes"? Does it mean that domestic production of tobacco products is allowed whereas foreign producers of tobacco products are not allowed to enter the market? If this is the case, could India explain the rationale for the unequal treatment of foreign investors interested in manufacturing in India compared to domestic manufactures?
Reply: No industrial license for creation of new capacity or addition of capacity has been permitted in the tobacco sector since the year 2000. The decision to prohibit FDI in the manufacture of "cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes" has aligned FDI policy with the domestic situation.
