Cigarette Prices in India Surge After Excise Duty Hike From February 1

Cigarette prices across India have risen significantly following an excise duty hike effective February 1. Distributors reported that standard 10-stick packs now cost Rs. 22 to Rs. 25 more. Premium cigarettes, 76 mm in length, face an increase of Rs. 50 to Rs. 55 per pack, depending on the brand. 

Advertisment

While manufacturers haven’t issued official MRPs, distributors have already begun billing retailers for old stock at revised prices under 40% GST, according to PTI.

Distributors Adjust to New Tax Structure

Wholesale markets remained closed on Sunday, but distributors expect fresh stock with updated MRPs to arrive from Monday. Some companies have put stocks on hold until billing aligns with the new tax structure. 

The All India Consumer Products Distributors Federation (AICPDF) expressed its belief that higher cigarette prices will lead to increased smuggling and counterfeit tobacco products, which will harm traditional retailers who depend on legal tobacco sales.

Advertisment

Brand-Wise Price Updates

Popular mid-sized cigarettes, such as Wills Navy Cut (76 mm), priced at Rs.95 per pack, are now likely to cost Rs. 120. The cost of Wills Classic, Wills Classic Milds, and Gold Flake Lights, which currently costs Rs. 170, will rise to a range between Rs. 220 and Rs. 225. 

Slim cigarettes, including Classic Connect (97 mm), may increase from Rs. 300 to Rs. 350 per 20-stick pack. Excise duties vary by length, with short non-filter cigarettes at Rs. 2.05 per stick, medium 65–70 mm at Rs. 3.6–Rs. 4, and long premium cigarettes about Rs. 5.4 per stick.

Impact on Retailers and Consumers

AICPDF president D Patil noted, "Tobacco products are among the few categories where small shopkeepers are still relevant. If this too is pushed into the hands of illicit networks, what will be left for honest retailers?" Experts believe that the tax increase will achieve two objectives by reducing consumption and raising revenue, but it will create problems for legitimate distribution networks. 

Advertisment

Retailers and consumers currently face two challenges, as they must pay increased prices while checking product availability.

Conclusion: Market Outlook

The excise duty hike marks a significant shift in India’s tobacco taxation. Legal packs now cost three times more than their previous price, which has pushed prices to their highest historical levels. 

Experts warn that careful monitoring is needed to prevent black-market sales. Distributors expect to complete their stock distribution by the end of the month, causing immediate pricing changes for cigarettes and other tobacco products in India.

Advertisment