The Government on Tuesday allowed 100 per cent FDI in five plantation crops, mainly coffee, rubber, cardamom, palm oil tree and olive oil tree via automatic route, a move hailed by the industry.
At present, 100 per cent FDI is allowed only in tea plantation through the Government approval route.
“In line with this sector, the Government has decided to open certain other plantation activity namely, coffee, rubber, cardamom, palm oil tree and olive oil tree plantations also for 100 per cent foreign investment,” the Commerce and Industry Ministry said in a statement.
Foreign investment in the plantation sector would henceforth be under automatic route, it added.
Welcoming the decision, Mumbai-based Solvent Extractors Association (SEA) Executive Director B V Mehta said, “Allowing FDI in palm oil tree is a welcome step and will boost domestic production.”
He, however, said that the benefit would be more if the Government declares palm oil tree as a plantation crop and exempted from land ceiling act.
The country produces annually around 3 lakh tonnes of coffee, over 8-9 lakh tonnes of rubber and about 17,000 tonnes of cardamom.
Certain conditions of FDI policy on agriculture and animal husbandry have also been simplified.
Welcoming the move, All India Rubber Industries Association President Mohinder Gupta said, “India is Natural Rubber deficit for many years now. The gap between production and consumption of natural rubber is widening. Foreign Direct Investment will bring new practices and technology for giving much-needed fillip to production in India.”
Echoing views, Automotive Tyre Manufacturers Association (ATMA) Director General Rajiv Budhraja said Rubber plantation sector in India needs infusion of funds and technology. Area under plantation needs to be widened besides the productivity needs to be enhanced. The move will rekindle new interest in the rubber sector