Tobacco Industry Country Profile – India
- 1 India
- 2 Tobacco Industry in India
- 3 TobaccoUnmaskedSouth.Asia Resources
- 4 Notes
Republic of India is the largest country by area and population in South Asia. It has 29 states and seven Union territories. India is surrounded by the Indian Ocean on the south, the Arabian Sea on the southwest, and the Bay of Bengal on the southeast. To the west of India is Pakistan; to its north are China, Nepal, and Bhutan while Bangladesh and Myanmar are to its east. According to World Population Review in terms of area India is the seventh largest country and by population it is the second largest populated country in the world.. As per the World Atlas the modern Indians, who arrived in India were hunters and were dependent on animals as their food. Later the settled life began in India, with people depending on agriculture as their source of food and later income. At present India is predominantly an agricultural country with wheat, rice and tobacco being its main cash crops.
With the advent of Indus Valley Civilisation, India began to develop as a nation, followed by rules of Kingship and Dynasties. The seventeenth century marked the beginning of rule of the British East India Company which was succeeded by rule of British crown. India ushered into a new era of independence and formed it first democratic Parliamentary government after it attained its independence from Britishers on 15th August, 1947. Today India is recognised as the world’s largest democracy. With its political, social and religious past, India today is a land of myriad languages, numerous cultures, countless customs; inhabited by people of various religions, beliefs and practices. India is one of the largest growing economies in the world. India recorded GDP growth rate of 6.8 in 2018.
Healthcare sector is one of the most blooming sectors in India. By 2020, it is expected that Indian healthcare sector is expected to reach Rs 19,56,920 crore (US$ 280 billion).
Tobacco Use in India
As of 2020, India is the second largest consumer of tobacco according to Global Adult Tobacco Survey (GATS) GATS shows that 28.6% (266.8 million) of adults aged 15 and above in India currently use tobacco in some form. The prevalence of tobacco use among men is 42.4%, while among women it is 14.2%. Among the adults, 24.9% (232.4 million) are daily tobacco users and 3.7% (34.4 million) are occasional users.
The most commonly used tobacco product in India is smokeless tobacco, which is used by 21.4% of adults Indians, followed by beedi that is smoked by 7.7% of adult Indians.
Burden of Tobacco Use
As per the Tobacco Atlas, tobacco kills 13,452 men every week. As per Government of India’s report on economic burden of tobacco related diseases, the total economic costs attributable to tobacco use from all diseases in India in the year 2011 for persons aged 35-69 amounted to Rs. 16,800 crore (US$ 3.6 billion), and associated indirect morbidity cost amounted to Rs. 14,700 crore (US$ 3.1 billion).
Tobacco Industry in India
India is the second largest producer and third largest exporter of tobacco in the world. The ITC limited currently has the highest market share (84.27%). Rest is distributed among companies such as Kothari Products Ltd., Godfrey Phillips India Ltd., VST (Vazir Sultan Tobacco Company) Industries Ltd., and other small scale cigarette manufacturers.
Tobacco Cultivation & Manufacturing
According to a factsheet of The Tobacco Institute of India on tobacco production, 0.24% of India’s total arable land is used for tobacco cultivation. India grows 93 varieties of tobacco and annual estimated production is 800 million kilogrammes, making India the second largest producer of tobacco in the world.
In 1976 under The Tobacco Board Act 1975, the Government of India established the Tobacco Board, under the Ministry of Commerce and Industry, Department of Commerce. According to its website, “"Tobacco Board is committed to accomplishing its role - the expressed will of parliament - for the smooth functioning of a vibrant farming system, fair and remunerative prices to tobacco growers and export promotion."
Role in the Economy - Tax, Exports and Employment
In India two types of taxes are levied, direct and indirect. Direct tax is levied on the taxable income of individuals and corporates. The indirect taxes are levied on the services and the goods. The Centre and the State government levy indirect taxes. Taxes to be levied are announced by the government for each financial year. India’s excise revenue collected from tobacco products in 2014-15 was nearly USD 2.69 billion.
Goods and Services Tax (GST) was implemented in the country with effect from 1st July, 2017 replacing all the other taxes like excise, service tax and state taxes. Under the new GST regime 28% GST is levied on cigarettes and smokeless tobacco. National Calamity Contingent Duty and compensation cess is also levied on specified tobacco products.
The total exports value of tobacco products in 2014-15 is recorded to be USD 0.9 billion, out of which the major share is from unmanufactured tobacco export earnings.
In India, both skilled and unskilled people are employed at various levels in the demand and supply chain of tobacco industry. The tobacco industry is highly unregularised. Even the ‘registered growers’ are only listed in certain States. As per International Labour Organisation’s Tobacco Sector Employment Statistical Update, India recorded a rise from 62,800 tobacco growers in 2001 to 89,300 in 2013.. In India,1.7 million children are employed in beedi rolling industry, as per an investigative report published by BBC. According to the same investigate report,::“Working between 10 and 14 hours a day, Aliya's mother and others must roll at least a 1,000 beedis each, to earn a paltry sum of less than $2 (£1.28) paid by the middleman. The beedi manufacturers, however, make billions of dollars”.
Section 135 of Companies Act, of India, 2013 Corporate Social Responsibility makes it mandatory for all major corporate entities to spend at least two per cent of their profit on CSR (Corporate Social Responsibility) works.. The Tobacco companies are involved in corporate social activities in a range of areas including education and health.
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