Pressure seems to be mounting on govt to impose a ban

The Directorate-General of Foreign Trade (DGFT) has batted against imposition of any ‘blanket ban' on import of foreign tobacco and cigarette brands even as the inter-Ministerial consultations are on to arrive at a point of view on the issue.

The DGFT is learnt to have written to the Industry Ministry which has further forwarded the view point to the Finance Ministry for a final decision even as pressure seems to be mounting on government from local lobbies to impose a ban. “We are not in favour of any kind of ban. It will not only increase the incidence of smuggling but also lead to massive revenue to the government which it is presently getting. Any kind of ban does not make sense. At the most, the duty could be hiked or a similar measure could be adopted,” a senior Commerce Ministry official said.

In an inter-ministerial communication, the DGFT has pointed out that a consortium of Indian farmers associations (CIFA) demanded removal of import of cigarette under open general licence (OGL). “The association has pointed out alarming increase of imports due to OGL and also growth of smuggled and controlled cigarettes resulting in tobacco farmers getting low price for their product. CIFA has, therefore, requested the government to remove import of cigarette under OGL,” the DGFT has said. India's cigarettes import has increased to Rs.5,548.85 lakh in 2010-11 from Rs.4,773.77 lakh in 2009-10, earning revenue for the government. During April-June this fiscal, imports stood at Rs.1,837.65 lakh. According to reports, 17 billion cigarette sticks are smuggled into the country every year, making it the sixth highest consumer of smuggled cigarettes in the world. The huge price differential in India and neighbouring countries is also one of the reasons for the increase in smuggling of cigarettes.

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