Taxes prove futile to burn out cigarette use in India, PgII

Key Highlights:

• Tobacco use in India causes 1.35 million deaths annually due to diseases like cancer and cardiovascular issues.
• India is the world's second-largest consumer and producer of tobacco, with the government increasing cigarette prices through excise duties.
• Recent tax hikes increased cigarette prices by 15-30%, still falling short of the WHO's 75% benchmark for deterring consumption.
• The WHO Framework Convention on Tobacco Control (FCTC) has alerted governments about the tobacco industry's interference in weakening global tobacco control measures.
• The 11th session of the COP in Geneva, Switzerland in November 2025 discussed measures to prevent nicotine addiction and protect the environment.

Detailed Insights:

• Tax increases are globally proven to reduce tobacco consumption, but historically, tax increases on tobacco products in India have not kept pace with consumer inflation.
• A 2017 study showed that a 10% increase in cigarette VAT rates was associated with a decrease in cigarette smoking among men.
• Current taxes on cigarettes in India account for only 53% of the retail price, significantly below the WHO's 75% recommendation to deter consumption.
• The GST rate on beedis has been reduced to 18%, a lost opportunity as beedis are consumed by lower-income groups and are the second most prevalent form of tobacco use after smokeless tobacco.
• The tobacco industry employs tactics like lobbying to influence tobacco control policies, with all sectors of the industry shown to influence policy in their favor in India.
• The COP discussed protecting the environment from tobacco harms, including managing waste from tobacco and nicotine products, as trillions of cigarette butts pollute the environment annually.
• Experiences with tobacco industry interference should be applied to regulating other health-harming industries like the alcohol and food processing industries.

Key Concepts Involved:

• Excise Duty: A tax levied on goods produced within a country, often applied to items like tobacco and alcohol.
• Value Added Tax (VAT): A consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale.
• GST (Goods and Services Tax): An indirect tax used in India on the supply of goods and services.
• WHO Framework Convention on Tobacco Control (FCTC): A treaty to reduce tobacco use and exposure to tobacco smoke.