The aim is to make it more effective and more inclined to the WHO Framework Convention on Tobacco Control (WHO FCTC) guidelines, sources said. Currently, the penalty for smoking in restricted areas is up to Rs 200.
The Union Health Ministry has re-initiated the process of amending the Cigarettes and Other Tobacco Products Act (COTPA) in a bid to strengthen its provisions, including a ban on the sale of loose cigarettes and heavy fine for violation of rules.
As India cracks down on e-cigarettes, the vaping industry argues that its devices are far safer than cigarettes.
An analyst, who requested anonymity, said cigarette companies can factor this excise duty impact when they hike prices next due to increase in tobacco prices.
India is the third largest producer and exporter of unmanufactured tobacco with exports more than Rs 5,000 crores to more than 115 destinations.
Cigarettes account for 86% of revenue from tobacco taxation, while the contribution to tax collections from beedi and smokeless tobacco are insignificant.
The study said the figures were arrived at by measuring the total cumulative intrinsic economic value generated by the sector over the years.
Philip Morris has urged the Indian government to create a regulatory environment for scientifically substantiated smoke-free alternatives.
Karnataka’s Health & Family Welfare department had, by a circular on June 15, 2016, said sale, manufacturing and distribution of e-cigarettes had been banned.
The health ministry had asked the commerce ministry to issue a notification banning import of Electronic Nicotine Delivery Systems (ENDS), including e-cigarettes and flavoured hookah.
Philip Morris and Godfrey have said they comply with Indian rules.
Godfrey Phillips has an exclusive procurement and supply agreement with Philip Morris International to manufacture and distribute Marlboro in the country.
India has 106 million smokers, second only to China, and a young demographic makes it an attractive market for tobacco companies.
The Kolkata-headquarted company has increased the prices by about 7 per cent to 14 per cent.
To do so would depart from WHO's strict longstanding policy of not working with the tobacco industry, whose business practices have been proven to be contradictory with and detrimental to public health, they said.
Bidi -- a cheap cigarette made of unprocessed tobacco wrapped in leaves -- is very popular in India, accounting for 81 per cent of the tobacco smoked and 72 million regular users over the age of 15.
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