On Tuesday, stocks of coffee manufacturers rallied by up to 8% on news that the government may consider 100% FDI in coffee plantation in India. Currently, India only allows FDI in tea plantation.
The Department of Industrial Policy and Promotion on Wednesday said that the government isn't planning 100% Foreign Direct Investment in coffee and rubber, thereby debunking expectations that came up on Tuesday that made coffee and rubber manufacturers cheer.
"There is no immediate plan to allow FDI in coffee and rubber plantation. These are all speculation. Nothing on cards," DIPP Secretary Amitabh Kant said.
At present, the government only allows 100% foreign investment, via government approval route, in the tea plantation sector.
As per estimates, the country'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.
In 2014-15, FDI into the country rose 27% to $30.93 billion.
To pull in foreign investments, the government has raised the FDI cap in the insurance sector and defence. It has relaxed policy in railways, construction and medical devices sectors.
On Tuesday, stocks of coffee manufacturers had rallied by up to 8% on news that the government may consider 100% FDI in coffee plantation in India.
The move would have helped bring in foreign players with efficient technology, and ramp up coffee production in the country, thereby boosting India's coffee exports.
India exported coffee worth $803 million in 2014-15 against $799 million in 2013-14.
It is estimated that the coffee output in the country will be at 3,31,000 tonne for 2014-15 crop year (October-September), against 3,04,500 tonne last year.
FDI in rubber would have helped India import less rubber. As per government data, India's natural rubber import increased to 442,130 tonnes in 2014-15, the highest so far, from 3,60,263 tonnes in 2013-14 and 2,62,753 tonnes in 2012-13.
The production of natural rubber declined to a 12-year low at 6,45,000 tonnes in 2014-15 as against 7,74,000 tonnes in 2013-14, down 12%.
To boost domestic production of the crop, the government is in the process of 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.
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