India Mulls Crackdown on Tobacco

India’s health ministry wants to ban public smoking, prohibit the sale of loose cigarettes and increase the minimum smoking age from 18 to 21, reports The Economic Times.

Earlier this week, the Union Health Ministry published the draft Cigarettes and Other Tobacco Products Amendment Act, which if implemented in its entirety could have long-term ramifications for the cigarette industry.

However, some analysts believe the government’s draft policy is ambitious and may not be fully implemented.

“In India, there are rules out there for many things, but implementation will be a major challenge,” said Abneesh Roy, executive vice-president at Edelweiss Securities.

Tobacco companies operating in India’s $12 billion cigarette market are likely to raise objections before the public consultation period of the proposal ends on Jan. 31.

“Some of the measures are very extreme and problematic,” one tobacco industry executive told Reuters. A second executive said concerns around the impact on employment and how farmers could be affected will also be shared with the government.

India had proposed sweeping changes to its tobacco-control law in 2015 as well but the proposal was dropped following protests from the tobacco industry.

Shares of market leader ITC tanked 2.9 percent on Wednesday to INR205.35 ($2.80) on the national stock exchange. Prior to this correction, shares of the soap-to-tobacco maker had risen 30 percent since November as analysts saw signs of recovery in the cigarette and non-cigarette fast-moving consumer goods businesses.