April 8, 2010 2:13 PM

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Govt bans FDI in cigarette manufacturing

The government today banned foreign direct investment (FDI) in cigarette manufacturing. Briefing reporters after the meeting of the Cabinet Committee on Economic Affairs (CCEA), Home Minister P Chidambaram said FDI will be prohibited in the manufacture of cigarettes, whether it is for domestic consumption or for exports. Mr Chidambaram said the prohibition will be notified and added the ban would also be applicable in the special economic zones. Under the existing norms, 100 per cent FDI is permitted in cigarette manufacturing, but an industrial licence is required and the proposals need to be approved by the Foreign Investment Promotion Board (FIPB). AIR correspondent reports the proposal was mooted by the Department of Industrial Policy and Promotion (DIPP) in the Ministry of Commerce and Industry.

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