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Tag: India

  • BAT to Sell Stake in ITC Hotels to Reduce Debt

    BAT to Sell Stake in ITC Hotels to Reduce Debt

    British American Tobacco announced that its subsidiaries plan to sell between 7% and 15.3% of their shares in ITC Hotels through an accelerated bookbuild. The exact number of shares will be set to optimize pricing. Established in 1975, the business of ITC Hotels has grown to encompass over 140 hotels across more than 90 destinations in the Indian subcontinent.

    Proceeds from the sale will help BAT move toward its “target 2–2.5x net debt/EBITDA leverage” by the end of 2026. BAT’s stake in ITC Hotels arose from a recent demerger and is not considered a strategic holding, CEO Tadeu Marroco said. Final sale details will be disclosed after the transaction closes.

  • India Raises Cigarette Tax to Curb Consumption

    India Raises Cigarette Tax to Curb Consumption

    India’s parliament approved the Central Excise (Amendment) Bill 2025, a tax reform expected to raise cigarette prices for the country’s estimated 100 million smokers. The bill was introduced on December 1 and passed on December 3.

    The new law replaces a temporary levy and imposes a value-based tax of 2,700–11,000 rupees ($29–$122) per thousand sticks, depending on size, in addition to a 40% goods and services tax. Experts estimate this could raise excise duties by 25–40% on average, potentially prompting higher retail prices. Finance Minister Nirmala Sitharaman emphasized that cigarettes should not become affordable, noting that current taxes account for about 53% of retail prices.

  • India Proposes New Taxes on Tobacco and ‘Sin Goods’

    India Proposes New Taxes on Tobacco and ‘Sin Goods’

    India’s government introduced two new tax bills today (December 1) aiming to maintain high levies on tobacco and other “sin goods” after the Goods and Services Tax (GST) compensation cess expires next year. The Central Excise (Amendment) Bill 2025, proposes excise duties of 60–70% on such products, with cigarette taxes calculated by length and filter type. Finance Minister Nirmala Sitharaman said the GST compensation cess on tobacco will end once all related loan and interest obligations are cleared. A second bill would impose a fixed monthly levy on pan masala and other notified goods.

    The revenue is expected to fund health programs and national security while keeping high-risk products expensive to discourage consumption and reduce under-reporting. Both bills require manufacturer registration, including for small-scale and handmade producers.

    The legislation is part of a broader tax realignment and will next go to parliamentary panels for review before a likely vote in 2026.

  • India to Use Cess, Not Tax, to Keep Tobacco Revenue Flowing

    India to Use Cess, Not Tax, to Keep Tobacco Revenue Flowing

    India’s central government is considering an additional cess (levy) on tobacco products such as cigarettes, gutkha, and chewing tobacco to sustain current tax revenues from these “sin goods” without altering the Goods and Services Tax (GST) framework, Moneycontrol reported. The move comes as the compensation cess regime under GST 2.0 is being phased out on products including tobacco and pan masala.

    The Centre reportedly intends to maintain the existing tax incidence through a separate central levy, ensuring states do not lose revenue once the cess mechanism expires. With consumption recovering and sin goods already in the 40% GST bracket, the Centre reportedly does not foresee a significant drop in state collections, opting instead for fiscal measures outside the GST framework to preserve inflows from tobacco and related products.

    Currently, tobacco products attract 28% GST plus a cess, bringing the effective tax burden to between 52% and 88%, among the highest for any consumer product. The GST Council, led by Finance Minister Nirmala Sitharaman, has kept this structure in place until at least the end of 2025, when the remaining liabilities under the pandemic-era compensation loan scheme are cleared. Industry observers say the proposed new levy would effectively extend the current tax burden beyond the cess period, maintaining both revenue stability for states and fiscal pressure on tobacco manufacturers.

  • India Opens Fourth National Tobacco Testing Lab

    India Opens Fourth National Tobacco Testing Lab

    Today (October 14), India opened its fourth national testing lab at NIMHANS in Bangalore, joining an apex lab in Noida and two regional labs in Mumbai and Guwahati. The new lab “is equipped to conduct comprehensive chemical and toxicological analyses of tobacco products, supporting the enforcement of regulatory standards and promoting scientific evaluation in line with national and international guidelines,” the institute said in a statement.

    “This initiative is expected to contribute significantly to evidence-based tobacco regulation and support government efforts to reduce the health burden caused by tobacco consumption in India,” the institute said.  

  • India Hosts First Workshop on Tobacco Ingredient Transparency

    India Hosts First Workshop on Tobacco Ingredient Transparency

    In an effort to curb tobacco-related harm in India, two national health groups held a workshop yesterday (September 16) in New Delhi focusing on the regulation of what goes into tobacco products. The Ministry of Health and Family Welfare (MoHFW), in collaboration with PGI’s Scientific Support Group, hosted the event, titled “Advancing the Implementation of WHO-FCTC Articles 9 and 10.” According to The Times of India, this marks the country’s first dedicated effort to regulate the contents and emissions of tobacco products and to mandate manufacturer disclosures.

  • Philip Morris Supports India’s Crackdown on Illicits

    Philip Morris Supports India’s Crackdown on Illicits

    On World Anti-Counterfeiting Day, Philip Morris International’s (PMI) India affiliate, IPM India, reinforced its commitment to combat illicit tobacco trade, protect government revenue, and uphold product integrity. The pledge aligns with India’s rollout of pack-level track and trace (T&T) technology, aimed at identifying and curbing counterfeit tobacco products.

    India, the fourth-largest illegal cigarette market globally, sees smuggled cigarettes make up 25% of its domestic market, according to PMI estimates. The company emphasized the critical need for stronger enforcement and collaboration to address the issue, which undermines public health, economic stability, and national security.

    Navaneel Kar, managing director of IPM India, praised the government’s T&T initiative, stating it will enhance transparency and enforcement. PMI says it has implemented T&T systems in over 140 countries, including the EU and GCC states, with positive outcomes in reducing illicit trade.

    Rodney Van Dooren, PMI’s Head of Illicit Trade Prevention for Asia Pacific, called for regional cooperation, noting India’s leadership role and growing influence in tackling counterfeit goods.

  • Bangladesh’s Unchanged Tobacco Taxes Draw Criticism 

    Bangladesh’s Unchanged Tobacco Taxes Draw Criticism 

    Bangladesh’s interim government’s proposed national budget for Fiscal Year 2025-26 (July 2025-June 2026) has drawn criticism from anti-tobacco activists for keeping cigarette prices and taxes unchanged across all tiers. Finance Adviser Dr. Salehuddin Ahmed presented the proposed budget, but activists suggest the decision will deprive the government of at least Tk20,000 crore ($2.4 billion) in additional revenue while making cigarettes more accessible to young smokers.

    Activists urge the government to increase cigarette prices across all tiers, particularly by merging the low and medium tiers—which account for 80% of the market—into a single category with a minimum retail price (MRP) of Tk90 ($1.08) for 10 sticks.

    The budget also leaves bidi prices unchanged for the sixth consecutive time, with supplementary duty remaining static for the 10th straight year. Similarly, taxes on smokeless tobacco products such as jarda and gul remain unaltered, sparking concerns among health advocates.

    While the budget raises the advance tax on cigarette manufacturers from 3% to 5% and increases supplementary duty on imported cigarette paper from 150% to 300%, activists argue these measures fall short of ensuring meaningful public health protection.

  • India Faces EU Sustainability Hurdles

    India Faces EU Sustainability Hurdles

    India has become the world’s largest tobacco exporter, with shipments worth $1.2 billion in FY 2023-24—a 19.46% increase from the previous year. Union Commerce Minister Piyush Goyal announced that tobacco exports, including unmanufactured tobacco and processed products, reached a record-breaking ₹12,005.8 crore ($1.5 billion). However, the industry faces mounting challenges as stringent European Union (EU) sustainability standards loom.

    The EU, a key importer of Indian tobacco, is set to enforce regulations under frameworks like the European Green Deal and Carbon Border Adjustment Mechanism by 2026, with full implementation by 2030. These measures aim to ensure sustainability, climate neutrality, and transparency. Experts warn that nearly 50-60% of India’s farm exports, including tobacco, could be impacted due to gaps in technology, training, and resources needed to comply with the EU’s rigorous standards.

    Indian farmers, many of whom are unaware of the impending changes, rely heavily on guidance from the Tobacco Board and the Central Tobacco Research Institute (CTRI). While efforts like promoting organic farming and reducing pesticide use are underway, the industry has yet to develop a comprehensive action plan. Tobacco Board Chairman Yashwant Kumar Chidipothu stresses the need for a gradual transition to meet global standards without jeopardizing the livelihoods of millions of farmers dependent on tobacco cultivation.

    As Europe tightens regulations, experts warn of potential domestic market disruptions, including declining export prices and increased local tobacco consumption. With time running out, the industry must navigate a delicate balance between sustainability and economic survival to retain its position in the global market.

  • India: Over 1,500 Kg of Product Seized in 2024 Virudhunagar Raids

    India: Over 1,500 Kg of Product Seized in 2024 Virudhunagar Raids

    Authorities seized 1,531 kilograms of banned tobacco products in 2024 across 403 shops and 44 vehicles in Virudhunagar, India, imposing fines totaling ₹1.06 crore (US$ 12,340) on offenders. The operations were part of the state government’s initiative to eliminate banned tobacco sales, particularly near schools and colleges.

    Joint teams from the Food and Safety Department and the police conducted 831 raids throughout the year. Offending shops were sealed, and vehicles transporting illicit tobacco were confiscated. In early 2025, additional raids led to the seizure of 16.275 kilograms of banned products from six shops in just four days.

    District Collector VP Jeyaseelan affirmed that strict measures will continue against those violating the ban, underscoring the administration’s commitment to public health and safety. The crackdown aims to curb access to harmful products and deter illegal sales in sensitive areas.