In a letter to industry minister Sikander Bakht on Tuesday, Sinha said the provision for allowing 100 per cent FDI in the cigarette industry -- though subject to compulsory licensing -- under the industrial licencing apparatus "must be reviewed".

In his letter, the finance minister also mentioned that human resource development minister Murli Manohar Joshi had written to him strongly opposing the Rothamans proposal. Sinha mentioned that he was in agreement with the view that the cigarette multinational's proposal, in its present format, should not be allowed to go through.

Sinha went on to say that a meeting should be convened by the prime minister to review all aspects of the proviso allowing 100 per cent investment in the cigarette industry.

The Rothmans proposal is awaiting the approval of theForeign Investment Promotion Board (FIPB), which is headed by industry secretary TR Prasad. The FIPB has not been able to take up the proposal for discussion so far, as the commerce ministry wants to take some more details from Rothmans on its proposed business operations in the country, specially its plans on the export front. Commerce ministry is likely to press for imposition of stiff conditions on the company's proposal, in case it agrees to let Rothmans set up a wholly owned subsidiary in the country.

The proposal has also become politically sensitive as Swadeshi Jagaran Manch, a powerful ally of Rashtriya Swayamseval Sangh (RSS), the parent body of the Bharatiya Janata Party (BJP), has also come out openly against the entry of multinational cigarette companies. SJM organising secretary Murlidhar Rao has convened a press conference to announce the organisation's decision against entry of 100 per cent foreign investment cigarette and liquor industry.

Defence minister George Fernandes has also writtena letter asking for review of the industry ministry's decision to allow 100 per cent FDI in the cigarette industry.

Besides, nearly three-dozen MPs have written letters to industry minister Bakht as well as prime minister against the policy in the last few weeks.

However, Bakht has strongly stood by his decision so far. Refusing to buckle under increasing pressure from various quarters against the policy decision, Bakht went to the extent of stating that he was the industry minister as he knew what was good or bad for the industry.

But industry ministry sources said that the company's proposal is unlikely to be taken up by the FIPB at its next meeting on October 24.