Cigarette makers decline after RBI confirms ban on FDI in manufacturing of tobacco products

Shares of three cigarette makers lost by 0.02% to 0.31% at 14:40 IST on BSE after the RBI clarified that foreign direct investment is prohibited in manufacturing of cigars, cheroots, cigarillos and cigarettes of tobacco or of tobacco substitutes.

The Reserve Bank of India (RBI) made announcement on Friday, 3 July 2015.

Meanwhile, the S&P BSE Sensex was up 28.66 points or 0.1% at 28,121.45.

Among cigarette makers, ITC (down 0.02%), Golden Tobacco (down 0.26%) and VST Industries (down 0.31%) declined. Godfrey Phillips India rose 7.7%.

The Reserve Bank of India (RBI) clarified that the prohibition applies only to manufacturing of these tobacco products and that foreign direct investment (FDI) in other activities relating to these products, including wholesale cash and carry, retail trading etc. shall be governed by the sectoral restrictions laid down in the FDI policy framed by the Department Of Industrial Policy & Promotion, Ministry of Commerce and Industry, Government of India and in the Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 as amended from time to time.

Powered by Capital Market - Live News