Govt weighs FDI in rubber, coffee plantation

The government is considering allowing foreign direct investment (FDI) in rubber and coffee plantation sectors with an aim to attract more FDI into the country. A proposal to this effect is under consultation of the Commerce and Industry Ministry, sources said. Currently, 100 foreign investment is permitted through the government approval route in the tea plantation sector.

However, FDI is not allowed in any other plantation sector or activity. According to sources, foreign players could be allowed to engage in rubber and coffee plantation, engage labourers in plucking of coffee beans or collecting latex from rubber trees and processing of the raw material. Permitting foreign investment will also help India reduce import bill of rubber and boost India's coffee exports, they said.

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 12-year low at 6,45,000 tonnes in 2014-15 as against 774,000 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. 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 USD 803 million in 2014-15 against USD 799 million in 2013-14.