Proposed bill will boost the illegal cigarette trade in India and will severely impact the demand for home grown tobacco and earnings of Indian farmers
Rising smuggled and illicit cigarettes markets causing loss in excess of Rs 1300 crore every year to India’s FCV Tobacco Grower
Requests not to get influenced by the international NGO’s who are misrepresenting facts to promote the interest of vested groups
Federation of All India Farmer Associations (FAIFA), a non-profit organization representing the cause of millions of farmers and farm workers of commercial crops across the states of Andhra Pradesh, Telangana, Karnataka, Gujarat etc., today appealed Narendra Modi Ji to recall the COTPA Amendment Bill as it will be a death knell for Indian FCV tobacco farmers. The proposed Amendment Bill, 2020 will provide huge boost to the ever-growing illicit cigarette business in India and will adversely impact the legal cigarette trade. As a result, there will be a drastic drop of demand for tobacco grown by Indian farmers and they will lose their only source of livelihood. FAIFA has submitted its appeal to various concerned Ministries such as the PMO, Ministry of Health & Family Welfare, Ministry of Agriculture, Ministry of Commerce & Industry, Ministry of Labour etc.
In the last few years, the Government has imposed harsh tobacco regulations such as increasing the size of pictorial warnings, imposing punitive taxation on Cigarettes with the tax burden more than trebling since 2012-13 and has even withdrawn export benefits. All these are leading to adverse consequences on livelihood of crores of Indians without providing any alternatives livelihood opportunities or help to farmers who cannot grow any other equally remunerative crop in the dry and arid regions they reside in.
Presently, India has become the 4th largest and fastest growing illicit cigarette market in the world with illicit cigarettes representing 1/4th of the cigarette market. In the last one-and-a-half-decade illicit cigarette market in India has doubled from a level of 13.5 billion sticks in 2006 to 28 billion sticks in 2019. Illegal cigarettes do not use locally grown tobaccos and hence, an increase in illegal trade impacts the livelihood of tobacco farmers in the country as demand for domestic tobaccos reduces further. FCV farming community has lost more than Rs.6,000 crores over the last 7 years due to drop in off take of their produce. The growing illicit cigarette trade is not only affecting the legal cigarette industry and farmer incomes but is also affecting government revenues.
Moreover, India has a unique pattern of tobacco consumption and cigarettes are the smallest component of tobacco consumption in India and constitute only 9% of tobacco use. Over the last three decades, the legal cigarettes’ share of total tobacco consumption in India has declined from 21% in 1981-82 to 9% in 2019-20. During the same period the overall tobacco consumption in the country has increased by 46%. The legal market for tobacco being excessively regulated has not in any way reduced the demand for tobacco products but has only caused a shift in consumption from legal to illegal duty evaded cigarettes and tax-evaded cheaper products.