Philip Morris says Godfrey Phillips charges machinery costs; calls it 'business expense'
Philip Morris has for years paid manufacturing costs to Godfrey Phillips, despite a nine-year-old government ban on foreign direct investment in the industry.
Ahead of the ban, Philip Morris formed a new wholesale trading company with Godfrey in 2009, and the two sides signed a procurement agreement.
Philip Morris' director for corporate affairs in India, R. Venkatesh, said on Wednesday that under that agreement Godfrey "manufactures Marlboro cigarettes and recharges any costs related to special machinery for the manufacture" of those cigarettes to the global tobacco giant's Indian unit.
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