Parliamentary panel recommends regulated FDI in tobacco sector


New Delhi, August 26

For offering advantages to farmers, a parliamentary panel has beneficial allowing regulated international direct funding within the tobacco sector and establishing export-only tobacco farms to spice up outward shipments.

The Parliamentary Standing Committee on Commerce and Industry, chaired by YSR Congress chief Vijaysai Reddy, made these suggestions in its report submitted to Rajya Sabha Chairman M Venkaiah Naidu on Wednesday. The report is more likely to be tabled within the upcoming session of Parliament.

According to the report, the committee is of the opinion that the FDI in tobacco sector albeit in a regulated method would stimulate the manufacturing and processing of Indian tobacco, thereby boosting its export.

“The committee, therefore, recommends the Department to undertake a study to analyse the prospects of opening FDI investments in the tobacco sector at the earliest,” it mentioned.

Currently, FDI (Foreign Direct Investment) is prohibited in manufacturing of cigars, cigarettes and tobacco substitutes.

The panel has additionally advised making out there adequate funds for analysis and improvement actions, imposition of levy on sale of cigarettes to utilise it as a Market Stabilisation Fund to make sure worth safety to tobacco growers in instances of market disaster and extension of export incentive schemes to tobacco exporters.

Further, the committee has beneficial that the Department of Commerce in coordination with Ministry of Agriculture and Farmers’ Welfare undertake measures to stop additional shrinkage of land below tobacco cultivation in addition to “explore the feasibility of establishing export-only tobacco farms specifically for export purpose”.

Pushing for related export incentives to tobacco and its merchandise as offered to different agricultural and plantation commodities, the panel mentioned the proposed scheme of RoDTEP ought to lengthen the export advantages to tobacco and tobacco merchandise with the intention to present a degree enjoying area to Indian tobacco exporters.

Remission of Duties or Taxes on Export Products (RoDTEP) is a scheme for exporters to reimburse taxes and duties paid by them.

India produces about 800 million kg of varied sorts of tobacco yearly. The states of Andhra Pradesh and Karnataka are the principle producing states.

The nation is the third largest producer and exporter of tobacco on the earth and contributed Rs 6,001.02 crore in 2018-19 when it comes to international trade to the exchequer.

Besides exporting tobacco, the nation additionally exports quite a lot of tobacco merchandise comparable to cigarettes, minimize tobacco, bidis, hookah, completely different forms of chewing tobacco, snuff and cigars.

While voicing concern over low share of export of agricultural commodities as in comparison with their complete manufacturing, the panel referred to as for renewed concentrate on put up harvest infrastructure, provide chain, worth addition and exploring new abroad markets for selling export of agricultural, marine and plantation commodities sector.

The panel underscored the numerous position of Agriculture Export Policy in doubling farmers’ revenue and integrating agriculture sector with world worth chain. It additionally advised restructuring of Spices Board and to discover the feasibility of fixing a minimal assist worth for turmeric crop.

Welcoming the renewal of the Indian-Chinese Phytosanitary (associated to plant) protocol on reviving the export of tobacco leaves to China, the committee mentioned all efforts, together with consultations with the Chinese authorities, ought to be made to restart the export on the earliest.

Quality tobacco at par with worldwide requirements is offered in India at aggressive costs and there’s good potential for export of Indian tobacco to China. The revival of the phytosanitary protocol with China will pave the way in which for revival of Indian tobacco exports to China and show economically useful to Indian farmers. — PTI



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