In the present scenario, FDI has got permission in technology collaboration which would also include licensing for franchise, trademark, brand name and management contract in the tobacco sector. It is however, restricted in manufacturing cigars, cigarettes of tobacco and tobacco substitutes.
As per the sources, the Commerce and Industry Ministry has recommended to ban FDI even in licensing for franchise, trademark, brand name and management contract in the sector.
Sources revealed that, the ban would definitely effect the inflow of overseas funds to the tobacco sector; even through foreign technology collaboration including licensing for franchise, trademark and brand name.
The ministry has circulated a draft cabinet note and asked for the views of other departments like health, finance, commerce and Niti Aayog.