India's Enforcement Directorate is investigating Philip Morris International Inc. and its Indian partner Godfrey Phillips India Ltd. for alleged violation of the country's law, Reuters reported March 8, citing a source in the law enforcement agency.
The New York-based tobacco giant reportedly paid manufacturing costs to Godfrey indirectly even after a ban by the Indian government on foreign direct investment in the industry. India has banned foreign direct investment in cigarette manufacturing since 2010 to reduce smoking.
According to the Reuters report, Philip Morris operates in India through its local trading unit after the ban. Philip Morris established a wholesale trading company with Godfrey before the ban.
"Both companies are being looked into," the source confirmed to Reuters. The Enforcement Directorate and the companies did not respond to Reuters for comment.