Andhra Pradesh tobacco farmers have written to UPA chairperson Sonia Gandhi asking her to facilitate the banning of foreign direct investment (FDI) in cigarette manufacturing. With one letter from the commerce ministry already having been presented before the Cabinet in support of the ban,the ministry has been directed to put its position in writing again,this time by the party leader. There is a vertical split on the issue,even within the tobacco industry, said a ministry source on condition of anonymity. Among those supporting the prohibition is V V S Rama Rao,a tobacco grower and vice-president of the Andhra Pradesh Tobacco Growers Association,who has been chasing the department of industrial policy and promotion (DIPP) to weed out foreign tobacco investors since 2007. Industry advocates of the ban insist that foreign investment is cutting into their market share while the Tobacco Board Act has capped tobacco auctions,limiting supply for domestic producers. With the proposal now sitting before the cabinet committee on economic affairs (CCEA),direction from the party chair at Raos urging could finalise the ban. The cabinet committee on economic affairs (CCEA) has once again included the matter on its docket today,the third time the issue has been brought before the committee. The matter was tabled during previous sessions The policy has been supported by the influential ministries including those of health,commerce and industry and finance. The ban would close the door on foreign investors who currently enjoy the leniency of 100 per cent FDI so long as the company manufactures cigars,cigarettes or related products. Currently,companies also require industry licensing and permission from the Foreign Investment Promotion Board,however no limit exists on the number of licenses or approvals for either.
