US trade bodies in a joint letter objected to reported plans by the Commerce Ministry to completely close down the tobacco sector to foreign direct investment (FDI), according The Hindu website.
The finance ministry had written to the commerce ministry to consider imposing restrictions on cigarette imports in the upcoming foreign trade policy.
Five trade organisations, of which only the U.S. India Business Council was named, reportedly made their views known in a letter to the Indian ambassador to the US, Nirupama Rao.
The move to completely ban FDI in in wholesale trading in tobacco and cigarettes comes two years after India banned foreign direct investment (FDI) in cigarette manufacturing. Following the ban, some tobacco companies with FDI set up wholesale cash and carry operations, which were left open for the investment route, to cater to domestic demand.
Experts say a complete ban may not be in the offing owing to India's commitments under World Trade Organisation rules. Ministries including the health, finance and commerce and industry are involved in consultations on the issue in the backdrop of the new foreign trade policy. (pi)