FCV tobacco farmers seek review of tax hike on cigarettes

Flue-Cured Virginia (FCV) tobacco farmers from Prakasam and Nellore districts have appealed to the Prime Minister, Union Finance Minister, Andhra Pradesh Chief Minister and the Tobacco Board to review the steep excise duty hike on cigarettes announced on December 31, 2025, stating that it could seriously affect farmers’ livelihood.

During a protest, Federation of All India Farmer Associations (FAIFA) president P.S. Murali Babu said the sudden increase had created uncertainty among tobacco growers. He said farmers were fearing a sharp fall in demand and prices, making cultivation of the crop economically unviable.

Farmer leaders who met Tobacco Board Chairman Yashwanth Kumar Chidipothu recalled the 2014–15 episode, when a tax increase led to a significant drop in industry procurement and a fall in tobacco prices, necessitating government intervention.

They said the present hike, estimated at 50 per cent to 60 per cent, was much higher and could result in prices falling below the production costs.

India produces around 325 million kg of FCV tobacco annually, with a substantial share absorbed by the domestic cigarette industry. Farmers cautioned that export demand was already under pressure due to global oversupply, and any decline in domestic offtake could leave large quantities unsold.