Coffee stocks today surged up to 12 per cent as the government mulls allowing foreign direct investment (FDI) in the commodity’s plantation sector.
Shares of Tata Coffee soared 12.34 per cent, while CCL Products gained 9.69 per cent, Tata Global Beverages climbed 4 per cent and Bombay Burmah rose 3.62 per cent on the BSE.
A proposal to this effect is under consultation of the Commerce and Industry Ministry, sources said.
Currently, 100 per cent 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, bring in 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 the import bill of rubber and boost coffee exports, they said.