Indian government measures hurting ITC

ITC’s profit during the quarter that ended on December 31, at Rs26.35 billion, fell slightly short of analysts’ estimates of Rs26.92 billion as higher taxes on cigarettes and a government push to discourage tobacco consumption throughout India hurt sales, according to a Reuters story.

ITC, which accounts four out of every five cigarettes sold in India and which derives most of its revenue from cigarettes, is nearly 25 percent owned by British American Tobacco.

The impact of high taxes and duties was “exerting unprecedented pressure on legal (tobacco) industry sales volumes,” ITC was quoted as saying in a statement.

Prime Minister Narendra Modi’s government, which took office last year, has been adopting measures to curb India’s tobacco consumption.

It has increased taxes on tobacco products, ordered companies to place health warnings across 85 percent of the surface of cigarette packs and is considering banning the sale of single cigarettes, which make up about 70 percent of cigarette sales in the country.