India's federal government is looking into a proposal to ban foreign direct investment (FDI) in the wholesale marketing arms of foreign cigarette companies.
It is also exploring the possibility of shifting the import of tobacco products from the open general licence (OGL) to the restricted list.
After more than two years of deliberations, the government banned FDI in the manufacture of cigarettes last year. However, the health ministry and NGOs have complained that foreign cigarette companies use the marketing services route as a back door for investment and to support sales in India.
Both proposals would impact foreign companies that have set up fully-owned marketing subsidiaries. Japan Tobacco International last year set up JTI Wholesale India , while Philip Morris is a majority shareholder in IPM Wholesale Trading. (pi)