Question : FOREIGN INVESTMENT IN TOBACCO INDUSTRIES

(a) whether ITC, a tobacco giant of India has represented not to allow FDI for MNCs, as reported in `The Economic Times` dated November 30, 1999;

(b) whether the domestic cigarette industry faces the threat of takeover by MNCs by virtue of their money power and ability to sustain initial setback, can go to any extent to kill domestic industry and monopolise the market;

(c) if so, whether the representations have been made by the Nation building Forum and other organizations against entry of MNCs for their dubious role of killing and/or forcing Bharatiya organizations to sell their operations; and

(d) if so, the steps being taken to safeguard the domestic tobacco industry?

THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY ( DR. RAMAN SINGH )

(a) : M/s. ITC Limited had submitted a representation in October, 1999 but later withdrew the same on the ground that the report in The Economic Times might give rise to mis-interpretation of their views on the subject.

(b) to (d) : There are safeguards for the domestic industry, including cigarette industry, against hostile takeovers in the regulations notified by SEBI. There is also the requirement of Board Resolution before shares can be acquired in an Indian company. Futher, the cigarette industry is a licensable industry under the Industries (Development & Regulation) Act, 1951.