Are taxes on cigarettes adequate to deter consumers in India?

One puff of a cigarette, within seconds, infuses the human bloodstream (via the lungs) with nicotine, the acutely addictive and carcinogenic chemical in tobacco. Nicotine binds to the brain’s cellular receptors, sparking the dopaminergic reward system to keep smokers hooked. And then there are additives in cigarettes, such as menthol, which gets nicotine to linger longer in the body, affecting the central nervous system.

Tobacco use, one of the major causes of death and disease in India, kills 1.35 million people every year, from cancer, lung disease, cardiovascular disease and strokes, according to the World Health Organization (WHO). India happens to be the world’s second largest consumer and producer of tobacco. A huge source of revenue for the country, cigarettes aren’t banned, but every Budget, raises the price of a stick.

The additional excise duty, starting February 1, pushed up the price of cigarettes by 15–30% yet still fell short of the WHO’s benchmark on how much taxes should make up the retain price.

“We have strong evidence globally about the effectiveness of tax hikes in reducing tobacco consumption in India,” Upendra Bhojani, senior fellow, and the lead, Centre for Commercial Determinants of Health, at the Institute of Public Health, Bengaluru, told The Hindu. But he added that the challenge is that historically, especially until the last couple of years, tax increase on tobacco products “was not significant,” and especially did not keep pace with the consumer inflation index.

“This makes tobacco products affordable rather than costly,” Dr. Bhojani said.

He pointed to a 2017 peer reviewed paper that studied the association between State-level VAT rates and tobacco use in India. It showed that every 10% increase in cigarette VAT rates was associated with a decrease of 0.9% or 17.2% in cigarette smoking by men, and a decrease of 6.5% or 21.6% in the dual use of cigarette and beedi smoking among men. “The Tobacco Control Policy India survey showed lower decline, the Global Adult Tobacco Survey showed an even steeper decline,” said Dr. Bhojani.

Low income users

The recent taxes on cigarettes in India account for only 53% of the retail price. That is well below the 75% benchmark recommended by WHO as the level at which tobacco taxes begin to significantly deter consumption, especially among young and low-income users.

The last couple of years have seen government efforts to raise taxes on tobacco, said Dr. Bhojani, citing the example of a significant upward revision of excise duties as well as GST rate revision to 40% for cigarette and smokeless tobacco. There is also a cess now on smokeless tobacco. “These are certainly positive moves from the public health perspective. However, they are still lower than international best practice of upto 75%.”

The GST rate on beedis, however has been reduced to 18%, he pointed out. “Beedis are more prevalent than cigarettes, and the second most prevalent form of tobacco use after smokeless tobacco.” They are consumed by the lower income strata, “so its a lost opportunity as it will worsen the inequities in tobacco use and burden.” The GST rate on beedis could be made 40%, he added.

Not just lobbying

With strategies varying from lobbying to outright attempts to manipulate delegations, the tobacco industry’s tactics are a cause for serious concern, Andrew Black, acting head of the secretariat of the the WHO Framework Convention on Tobacco Control (WHO FCTC), said in a release. In October last year, the FCTC alerted governments and the public that the tobacco industry is intensifying efforts to interfere with the work of the Conference of the Parties (COP), the treaty’s decision-making body, to weaken global tobacco control measures.

“This is not just lobbying; it is a deliberate strategy to try to derail consensus and weaken measures to further the treaty’s implementation. The tobacco industry’s interference is one of the biggest constraints and barriers to the implementation of the Convention,” said Dr. Black. He cautioned vigilance against the industry’s tactics and misinformation. 

“All sectors of the tobacco industry — cigarette, beedis, and smokeless tobacco companies — have been shown to influence tobacco control-related policy in their favour in India,” said Dr. Bhojani. We have seen this through the India tobacco industry Interference Index, he added. “India is a party to the FCTC and the tobacco Industry’s Interference Index shows that the country has reduced marginally over the years.”

Industry’s pollution

In November 2025, the 11th session of the COP, which was held in Geneva, Switzerland, brought together Parties to the Convention to make necessary decisions to achieve the objectives of the FCTC, “including the discussion of measures to prevent nicotine addiction, and for the protection of the environment and human health, among others.”

During the COP, 160 Parties gathered for six days and made decisions on tobacco control and the environment; increasing sustainable resources for tobacco control; forward looking tobacco control measures; and issues relating to the liability of the tobacco industry for the damage it causes.

“These important decisions made by Parties to the Convention will contribute towards saving millions of lives in the years to come and protecting the planet from the environmental harms of tobacco,” said Dr. Black.

Among the themes discussed were protecting the environment and human health from the harms of tobacco, including measures to prevent and manage the waste produced by tobacco and nicotine products and related electronic devices. “Trillions of cigarette butts containing plastic filters and leaching harmful chemicals pollute the environment each year,” another WHO release stated.

Prashanth N. Srinivas, senior fellow at the Institute of Public Health, Bengaluru, goes beyond tobacco: “The experiences with tobacco industry interference and tobacco-related regulation need to be transferred to other health-harming industries, including the alcohol industry and the food processing industry,” he told The Hindu.

divya.gandhi@thehindu.co.in

Published – February 10, 2026 06:00 am IST