Diageo Radico Distilleries Pvt Ltd, a 50:50 joint venture between Diageo and Delhi-based spirits company Radico Khaitan has received the nod from the government to increase foreign equity participation from 50% 100%, a finance ministry statement said.
However, the proposal is subject to conditions according to Press Note 1 of 2005, under which any foreign company operating in India through a joint venture has to seek no objection certificate from its Indian partner before investing in other firms in the same segment.
In the joint venture, Diageo manages sales and marketing of Masterstroke whisky, a semi-premium whisky pitted against brands such McDowell's No 1 from United Spirits portfolio and Pernod Ricards Royal Stag in the semi-premium segment.
When contacted, Radico Khaitan spokesperson declined to comment on the issue but sources close to the company said that Radico will not be exiting the joint venture.
The joint venture launched Master Stroke whisky in 2007 but has not launched any other product in the segment in the last two years.
Radico Khaitan is the second largest manufacturer of India made foreign liquor in the country and has brands such as 8PM, Magic Moments and Bermuda under its portfolio.
Diageo is the worlds largest spirits company and sells imported brands such as Johnnie Walker Red, Black Label, Smirnoff and VAT 69 in India.