5 months ago
2
The Federation of All India Farmer Associations (FAIFA) connected Friday (January 2, 2026) said the government's determination to levy further excise work connected baccy products volition wounded farmers' income and exacerbate smuggling successful a marketplace already grappling with illicit trade.
The Finance Ministry past period notified excise duties of ₹2,050-8,500 per 1,000 cigaret sticks depending connected length, effectual February 1, 2026, nether the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026.
FAIFA, representing growers crossed Andhra Pradesh, Telangana, Karnataka and Gujarat, said the work summation contradicts the government's assurances of revenue-neutral taxation reform.
"We are shocked to spot that the committedness has not been kept, and alternatively a crisp summation successful taxes has been notified, astatine the outgo of farmers' livelihoods," FAIFA President Murali Babu said successful a statement.
The farmers' assemblage warned that higher retail prices volition trim ineligible cigaret consumption, hurting request for domestically-grown baccy and perchance creating a glut successful the harvest market.
Tax disparity
FAIFA besides said India's taxation authorities discriminates against Flue-Cured Virginia (FCV) baccy utilized successful cigarettes, with per-kilogram taxation implicit 50 times higher than for 'beedis' — hand-rolled cigarettes fashionable among lower-income consumers — and much than 30 times higher than chewing tobacco.
“FCV baccy attracts much than ₹6 successful taxation per dose successful finished products, portion beedis and chewing products look little than 1 paisa per dose,” the radical said.
India has emerged arsenic the world's fourth-largest illicit cigaret market, with amerciable products accounting for astir 26% of full consumption, according to manufacture estimates cited by FAIFA.
The organisation warned that tax-driven terms summation volition widen the spread betwixt ineligible and smuggled products, undermining enforcement efforts and reducing authorities revenue.
Sector nether pressure
FCV baccy accumulation has remained mostly level implicit the past decade, with auctioned quantities astatine 304.21 cardinal kg successful 2023-24 compared with 315.95 cardinal kg successful 2013-14, FAIFA information showed.
Cultivation country has fallen from 2,21,385 hectares successful 2013-14 to 1,22,257 hectares successful 2020-21, resulting successful an estimated nonaccomplishment of astir 35 cardinal man-days of employment crossed the farming and auction ecosystem.
Rising input costs person added to husbandman distress. The World Bank's fertilizer terms scale roseate 15% since the commencement of 2025, with di-ammonium phosphate prices up 23%, portion notified cultivation wage rates accrued 7% successful the 2024-25 fiscal year.
FAIFA has urged the authorities to rotation backmost the excise work and instrumentality revenue-neutral duties that enactment home agriculture portion discouraging smuggling.
