Growing Cigarette Industry in India


Unravel the story behind India’s booming cigarette market, current trends and future projections.

Have you ever wondered why cigarettes maintain such high demand despite their harmful effects? As the number of smokers in India continues to rise, so do tobacco companies’ profits. 

This article delves into India’s cigarette market details, exploring current trends and offering insights into the future. 

Let’s begin.

What’s Happening?

Before understanding the cigarette market, let us understand why people become addicted to smoking. The answer lies in nicotine, a substance found in tobacco leaves. As you inhale cigarette smoke, nicotine swiftly enters your lungs, reaching the brain within seconds. It interacts with nerve cells, inducing a relaxing effect. This triggers a craving for more, and the cycle repeats.

Nicotine’s calming impact on the nervous system is driving cigarette consumption, particularly among the youth, as a means to alleviate stress and anxiety. India’s growing population, rising disposable income, and hectic lifestyles have expanded the market. Notably, leading companies are catering to consumer preferences by offering a plethora of flavoured options.

Due to high taxes and strict tobacco control laws, there has been a decrease in the number of legal cigarette businesses. Still, the illegal cigarette business is increasing rapidly, as per Statista data.

Growing Cigarette Market

India’s tobacco industry is divided into cigarette and non-cigarette segments. As per the IMARC report, the cigarette market is projected to reach a staggering US $21.5 billion value by 2022. 

Market leaders are actively expanding their product portfolios to gain a competitive edge. Key players in India’s cigarette market include Godfrey Phillips India Limited, ITC Limited, Golden Tobacco Limited, NTC Industries Limited, and VST Industries Limited.

Companies are investing in point-of-sale (PoS) and on-pack advertising strategies to capture consumer attention. Statista forecasts the tobacco products market to grow annually at 4.72% (CAGR 2023-2027). Within this market, the largest segment is cigarettes, with a projected market volume of US$ 12,730.00 million in 2023.

The tobacco sector plays a significant role in India’s revenue generation. However, high taxes pose a major limitation for the cigarette market. These taxes lead to increased prices, burdening consumers financially and aiming to curb easy access to cigarettes.

India is among the 181 countries that have signed the WHO Framework Convention on Tobacco Control. The convention recommends a minimum of 75% tax on the retail price of all tobacco products, including cigarettes. Nevertheless, India’s tax levied on cigarettes falls below the WHO-recommended threshold.

That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!

*The companies mentioned are for information purposes only. This is not an investment advice.


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