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Govt says no ‘immediate plan’ for permitting 100% FDI in coffee, rubber plantation

19 Aug 2015 Evaluate

Government reportedly said that there is 'immediate plan' to allow Foreign Direct Investments (FDI) in the coffee and rubber plantation sector of country and also stated that these are only speculation and nothing is been finalized yet. However, if the government allows 100% FDI in the coffee and rubber plantation sector, it will help to reduce Import bill of rubber and boost country’s coffee sector. Currently, 100% FDI is permitted through the government approval route in the tea plantation sector. However, FDI is not allowed in any other plantation sector or activity.

In order to boost domestic production of the crop, the government is working for formulating a national rubber policy. Total rubber consumption by various industries, including tyre manufacturers, stood at 10,18,000 tonnes in 2014-15, 3.7% higher than the previous year. Meanwhile, India’s natural rubber import increased to 442,130 tonnes in 2014-15 as compared to 3,60,263 tonnes in 2013-14. The production of natural rubber declined to 12-year low at 6, 45,000 tonnes in 2014-15 as against 774,000 tonnes in 2013-14, down 12%.

As per estimates, India’s coffee output is pegged at 3, 31,000 tonne for 2014-15 crop year (October-September), against 3,04,500 tonne last year. India exported coffee worth $803 million in 2014-15 against $799 million in 2013-14.

Earlier, the government had raised the FDI cap in the insurance sector and defence, while it has relaxed policy in railways, construction and medical devices sectors. In 2014-15, FDI into the country rose 27% to $30.93 billion. 

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