India Country Profile

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Key Points

  • India is a country located in South Asia, part of the World Health Organization’s South-East Asia Region.
  • It had a population in 2022 of 1.42 billion. Amongst those aged 15+, tobacco use prevalence is 28.6%.
  • Smoking prevalence in India is 10.7%. However, the most popular form of tobacco in India is smokeless tobacco, with use prevalence of 21.4%.
  • India ratified the WHO Framework Convention on Tobacco Control in 2004, and the Protocol to Eliminate Illicit Trade in Tobacco Products in 2018.
  • The Indian cigarette market is dominated by four companies, which together accounted for 98% of sales in 2022. ITC Limited holds by far the largest market share, at over 73%.
  • The tobacco industry has deployed a wide range of tactics in India in recent years, including mobilisation of front groups and third parties; litigation against tobacco control measures such as graphic health warnings; and corporate social responsibility, including in partnership with government.

Since the early 2000s, India has made significant progress in tobacco control, introducing a comprehensive tobacco control law in 2004, reducing the affordability of tobacco products, and introducing graphic health warnings (GHWs) consistent with best practice worldwide.12 However, major challenges persist. The wide range of tobacco products available in India makes regulation and enforcement particularly complicated. The Indian state is also a major shareholder of ITC Limited, which has by far the largest share of the Indian market. This means that the government has an interest in socio-economic issues – such as ensuring the welfare of farmers and manual labourers working in the Indian tobacco industry, and protection of exports – as well as in public health.3

India remains the world’s second largest consumer, producer and exporter of tobacco.45

Tobacco Use in India

In 2022, the population of India was 1.42 billion.6 In the 2016-17 Global Adult Tobacco Survey (GATS), approximately 29% of the population aged 15+ reported current tobacco use – over 42% of males, and over 14% of females.27 This means that in absolute numbers, there were almost 267 million tobacco users in India aged 15 and over.4 In the 2019 Global Youth Tobacco Survey (GYTS), amongst adolescents aged from 13 to 15, 8.5% reported using some form of tobacco – nearly 10% of males, and over 7% of females.28

Amongst India’s smokers, the most popular product was not factory-made cigarettes but bidis: cigarettes rolled by hand in a dried leaf of the tendu tree. 7.7% of Indian adults reported smoking bidis, compared to 4% who smoked cigarettes.7

However, the most popular tobacco product in India overall is smokeless tobacco (SLT). More than 21% of Indians aged 15 and over reported being SLT users, compared to less than 11% who smoked, whether cigarettes, bidis, or both.27 SLT use is also significant amongst women and girls: nearly 13% of females aged 15 and over were SLT users, compared to 2% who smoked.27 The majority of female tobacco users in low- and middle-income countries (LMICs) are SLT users in India and Bangladesh.9 However, amongst adolescent tobacco users, smoking is more common than SLT use. Over 7% of adolescents reported current smoking, compared to just over 4% who were SLT users.28

India has the second highest number of oral cancer cases globally, accounting for a third of the total.10 More than 90% of India’s oral cancer cases are caused by tobacco use and of these, more than half are caused by SLT.11 The poor and less educated are worst affected, with much higher SLT use prevalence amongst these sections of the population.11 There were also over a million deaths attributable to smoking in 2019, accounting for nearly 11% of all mortality in India that year.12

A 2020 study put the economic cost of all illness and death attributable to tobacco use between 2017 and 2018 for those over 35 years of age at US$27.5 billion.13 Smoking accounted for 74% of this cost; smokeless tobacco 26%.13 Direct medical costs alone amounted to 5.3% of all health expenditure.13 However, the excise tax revenue from tobacco the previous year was just 12.2% of its economic cost.13 In simple terms, the economic burden of tobacco use is more than eight times the value of revenue the Indian government receives in excise from tobacco products.13 This economic burden accounts for over 1% of India’s GDP.13

Tobacco in India

Market share and leading brands

The Indian cigarette market is dominated by four companies:  ITC Limited, Godfrey Phillips India Limited (GPI), VST Industries Ltd., and Philip Morris International (PMI), which together accounted for 98% of sales in 2022.14

India banned foreign direct investment in tobacco manufacturing in 2010, which means that the transnational tobacco companies (TTCs) can only access the Indian market via shareholdings and licensing agreements with local producers.1516

ITC Limited

ITC Limited (formerly India Tobacco Company Limited), dominates the Indian tobacco market, with a share of over 73% in 2022.14 Its largest shareholder is British American Tobacco (BAT), which held just under 30% of shares until March 2024.1718 The Indian state is also a major shareholder, via various state-owned insurance corporations and investment portfolios.18 Its products include India’s three bestselling brands of cigarettes: Gold Flake, Wills and Scissors.19

In a presentation to investors in June 2023, BAT CEO Tadeu Marroco stressed the importance of the company retaining at least a 25% shareholding in ITC, given that this provides BAT with seats on the ITC board and the right to veto company resolutions.20 Marroco also highlighted the potential of the vast Indian market in terms of newer nicotine and tobacco products, particularly oral products such as nicotine pouches.20 In March 2024, BAT reduced its holdings in ITC to 25.5%.21For more details see ITC Limited.

Godfrey Phillips India Limited (GPI)

GPI had a market share of almost 10% in 2022, the second largest after ITC.14 PMI is the second-largest shareholder with a stake of just over 25%.22 Major brands include Four Square, Cavenders and Tipper.19

VST Industries Ltd

VST, formerly Vazir Sultan Tobacco Company, had a market share of over 9% in 2022, the third largest.14 With a stake of over 32%, BAT is its largest shareholder.23 Its major brands include Total, Charms and Charminar.19

TTCs’ licensing agreements

PMI has a licensing agreement with GPI, under which GPI manufactures and sells the brands Marlboro and Red & White in India, though PMI retains brand ownership internationally.141924 This gives PMI a 5.4% market share from a global ownership perspective.14 Similarly, ITC manufactures and sells the brands Berkeley and Benson & Hedges in India, though Japan Tobacco International and British American Tobacco are the global owners, respectively.1419 Both companies have a market share of less than 2%.14

Smokeless tobacco and bidis

The Indian smokeless tobacco industry is based largely on small scale, rural production, for which accurate data is not available.25 Local manufacturers account for significant segments of the market in several regions of India.25 Similarly, bidi production depends largely on small home-based manufacturing operations and accurate data is not available.25

At the national level, the biggest companies in the chewing tobacco/gutkha (see section “Undermining the gutkha ban”) market are believed to be Dhariwal Industries, Dharampal Satyapal (DS Group) and Som Sugandh Industries, which together accounted for around a quarter of sales in 2010.25 There is also interest from the big cigarette companies in smokeless tobacco; Godfrey Phillips launched its own range of chewing products in 2010.26 A 2021 paper found that 93% of SLT products bought in India were non-compliant with packaging regulations: either they did not have graphic health warnings, or the warnings were too small.27

Tobacco farming

India is the world’s second biggest tobacco producer after China, producing over 766,000 tonnes of leaf in 2020.28 This accounts for 9% of all global production.5 Though tobacco production in India has increased significantly in recent decades – from 438,500 tonnes in 1980 – it has fallen slightly from a high of 830,000 tonnes in 2011.29

Child labour

Indian bidis feature on the U.S. Department of Labor’s 2022 List of Goods Produced by Child Labor or Forced Labor.30 While information on child labour in the bidi industry is not widely available, a study published in 2009 found that more than 1.7 million children worked rolling bidis in India.31 This disproportionately affects girls, who are often drawn into the industry to support their families. Bidi rollers may work 10 to 14-hour days to produce over 1,000 bidis, in what a BBC report from 2012 described as “slave-like working conditions”.31

Tobacco and the economy

India is the world’s second largest exporter of tobacco leaf, after Brazil.5 According to UN Comtrade, India exported nearly US$816 million in raw tobacco in 2022, compared to nearly $21 million in imports.3233 Export figures for 2021-2022 from the Indian Brand Equity Foundation (IBEF) – a trust established by the Indian Department of Commerce – were slightly higher, at US$842 million.5

India exports tobacco to more than 115 countries around the world, the biggest recipient of which is Belgium, which accounts for around 18% of India’s total tobacco exports. Other major export destinations for Indian tobacco include the United Arab Emirates, Singapore and the United States.5

India is also a major net exporter of cigarettes. According to UN Comtrade, it exported over US$100 million in cigarettes in 2022, compared to nearly $26 million in imports.3435

According to IBEF, the tobacco industry in India employs about 36 million people in farming, processing, manufacturing and export activities.5

Illicit trade

The Tobacco Institute of India, an industry body established by ITC, GPI and VST in 1992, puts the scale of the illicit tobacco trade at a quarter of the market.36 However, independent studies put that figure much lower, at around 3% to 6%.37 This makes illicit trade in India relatively small by global standards.38 A 2018 study, which found that 2.73% of the empty cigarette packs collected in India were illicit, noted significant differences across the country.39 Areas with greater illicit trade penetration are often targeted by studies funded by the tobacco industry to exaggerate overall levels of illicit trade.40

Studies have also cast doubt on industry claims that tobacco tax increases have led to expansion of illicit trade. For example, according to ITC, tax increases during the period 2012 to 2017 resulted in rapid growth of illicit trade, making India the fourth largest illicit market globally.41 However, a study published in 2020 by experts from the WHO and the Indian government put the illicit cigarette trade at 6% of the market in 2016-17 – an increase of just 0.9% from 2009-10.38

Similarly, a joint report published in 2017 by the accountancy firm KPMG and the Federation of Indian Chambers of Commerce and Industry (FICCI) argued that illicit trade – driven in part by higher taxes on cigarettes – was providing funds for terrorism and organized crime.42 However, both ITC and GPI are members of FICCI, which has a history of opposing tobacco control measures in India (see Influencing policy: graphic health warnings). Similarly, KPMG has strong ties with the tobacco industry going back decades, and its work on illicit trade has been strongly criticised elsewhere. Critics argue that KPMG’s research has exaggerated the scale of illicit trade and has been used to oppose tobacco control regulations such as plain packaging.

Tobacco and the environment

A 2018 study estimated that in order to produce 100 billion cigarettes, nearly 67,500 tonnes of CO2 equivalent were emitted in India in 2010 – the equivalent of 14,544 petrol-powered vehicles driven for a year.4344 The industry has also been a major cause of deforestation: it is estimated that 680 square kilometres of scrub forest were destroyed and degraded for tobacco curing and the manufacture of cigarettes and other smoking consumables between 1962 and 2002.45

A 2022 study estimated that 170,000 tonnes of waste is produced by the packaging of tobacco products annually in India, two-thirds of which correspond to smokeless tobacco (SLT) products.46 Analysis of segregated waste revealed that 73,500 tonnes of plastic, 6,100 tonnes of foil and 1,350 tonnes of used filters are discharged annually into the environment.46 Cleaning up this waste costs Indian taxpayers roughly US$766 million every year.47

Roadmap to Tobacco Control

India was the eighth country to ratify the WHO Framework Convention on Tobacco Control (WHO FCTC) in 2004.48 It ratified the Protocol to Eliminate Illicit Trade in Tobacco Products in 2018.4950

The Cigarettes and Other Tobacco Products Act (COTPA), passed in 2003, is the main comprehensive tobacco control law in India. Amongst other provisions, it banned smoking in most public places, prohibited the advertising of cigarettes and other tobacco products, and banned sales to anyone under the age of 18.51 Since then, a number of rules have been introduced to aid implementation of COTPA and provide definitions.1 In 2007-08, the government launched the National Tobacco Control Programme (NTCP), which aimed to reinforce COTPA and facilitate implementation of the tobacco control strategies contained within the WHO FCTC.52

In 2020, an amendment to COTPA was drafted by the Ministry of Health.53 Aiming to further strengthen the original legislation and boost compliance with WHO FCTC, it will abolish designated smoking areas, prohibit the sale of individual cigarettes (single sticks), and raise the legal age required for purchase of tobacco products from 18 to 21.5354 However, as of September 2023, this amendment has yet to become law.

Citing concerns about the health impacts of vaping on young people, the Indian government introduced a ban on electronic cigarettes in 2019. The law prohibits the production, manufacture, import, export, transport, sale, distribution, storage and advertisement of e-cigarettes.155 Though their use remains rare in India as of 2023, the law closes off a huge potential market for e-cigarette companies.56

For more details, please see the following websites:

Tobacco Industry Interference in India

Tobacco industry tactics in India include mobilisation of front groups and third parties; litigation against tobacco control measures, such as graphic health warnings; and corporate social responsibility, including in partnership with government.

Delaying rollout of larger graphic health warnings

In October 2014, the Indian Ministry of Health and Family Welfare announced its intention to increase the area covered by graphic health warnings (GHWs) on tobacco products, from 40% to 85%.57 GHWs are a well-established, evidence-based and cost-effective measure of reducing tobacco use.58 They may also be particularly effective in India, given both the country’s linguistic diversity and its literacy rate (as of 2018, over a quarter of the population was unable to read or write).5960

The tobacco industry deployed various tactics in an attempt to block this legislation. These included mobilising third parties and front groups, spreading misleading information, and submitting more than 30 legal challenges in state-level courts throughout India.6162

Third parties and front groups which mobilised against the legislation included the following:

These groups wrote letters to and met with policy makers, launched campaigns in the media against the proposal, and filed legal challenges.6162

For example, FAIFA bought full-page advertisements in leading national newspapers, claiming that larger GHWs would be detrimental to the livelihoods of tobacco farmers and fuel the illicit trade.6163 FAIFA, CII and FICCI all wrote letters to the Minister of Health, J.P. Nadda, echoing these arguments.6465 The Tobacco Institute of India filed a legal challenge against the government in the High Court of Karnataka.66 Finally, ASSOCHAM addressed a communiqué to the government, stating that the GHWs would endanger the livelihoods of more than 45 million people and lead to a flood of illicit imports.67

These industry strategies succeeded in delaying the rollout of the 85% GHWs for a year, from April 2015 until April 2016.68 However, the legal challenges continued even after implementation. In 2017, the High Court of Karnataka ruled that India should revert to the pre-2016 40% warnings. This decision was overruled in 2018 by the Indian Supreme Court and the 85% warnings have remained in force ever since.62

The eventual introduction of the 85% GHWs saw India jump from 136th to third position in the global ranking for size of health warnings on tobacco products.69

Undermining the gutkha ban

Gutkha, one of India’s most popular smokeless tobacco (SLT) products, is a mix of crushed Areca nut (a well-known risk factor for several cancers even when consumed without tobacco), with tobacco, catechu, paraffin, slaked lime and flavourings.7071 Highly addictive and very cheap, gutkha is popular amongst women and young people.72

Since 2012, there have been state-level bans throughout the country in an attempt to reduce its prevalence, but it remains widely available.7374 Producers have found ways to circumvent the bans, such as by packaging and selling the constituent ingredients of gutkha separately.7475

In the state of Tamil Nadu, gutkha remained widely available despite being banned in 2013.7677 In 2016, officials from India’s Income Tax Department discovered details of a series of suspected bribes worth nearly US$6 million made by leading manufacturer MDM to public officials, allegedly to facilitate the storage, transport and sale of gutkha.617678

Alleged recipients of bribes included a government minister, police officers and senior civil servants.79 In November 2022, after four years of investigations in three states, India’s Central Bureau of Investigation filed charges against 21 individuals.7976

Corporate social responsibility: partnerships with government

Tobacco companies often use corporate social responsibility (CSR) initiatives to enhance their public image and corporate reputation.

In the implementation guidelines for Article 5.3 of the WHO FCTC, the WHO states that these activities fall within its definition of tobacco advertising, promotion and sponsorship – and should therefore not be endorsed by Parties to the treaty.80 However, in India, under the Companies Act 2013, all large corporations are required to spend at least 2% of their average net profit in the previous three years on CSR.81 This helps to legitimise tobacco industry CSR, as companies argue they are only fulfilling their legal duties.3In its sustainability reporting, ITC states that its CSR initiatives fall within the scope of the 2013 legislation.82

ITC has contributed frequently to government programmes and has worked with government institutions.3 For example, in 2017, ITC contributed to a fund set up by the Indian government to attract funding from corporations and private donors for the provision of sanitation and clean drinking water; and to the Clean Ganga Fund, established by the government to rehabilitate the River Ganges.82 In his speech to shareholders at the 2017 AGM, the then ITC CEO cited several public-private partnerships with state governments in India on water management projects, stating that they aligned with a national programme which aimed to expand irrigation coverage and improve efficiency of water use.8384

This type of public-private CSR was particularly widespread during the COVID-19 pandemic. In total, between March and June 2020, the Indian tobacco industry contributed around US$36.7 million in donations to various government funds, both at federal and state level.81 The industry also partnered with other stakeholders, including NGOs, other private sector actors and even popular Bollywood singers. ITC was the biggest cash and in-kind contributor.8185

Corporate trademarks were widely visible during these CSR activities, and the initiatives were publicised in leading newspapers and by senior politicians.818687

Relevant Links

Tobacco Tactics Resources

TCRG Research

For a comprehensive list of all TCRG publications, including research that evaluates the impact of public health policy, go to TCRG publications.

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References

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