Tobacco growers protest hike in duty on tobacco products

Tobacco growers of Karnataka, who took out a protest march in Periyapatna on January 5 and Hunsur on January 6 against the steep hike in duty imposed on tobacco products by the Centre, met Chief Minister Siddaramaiah in Mysuru on January 6 and urged him to write to the Centre to roll back the “excessive” increase in duty.

The tobacco growers condemned the Union Finance Ministry’s recent notification of Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing machines (Capacity Determination and Collection of Duty) Rules 2026, which come into force from February 1.

The growers, who had gathered under the aegis of Federation of Karnataka’s Virginia Flue Cured (VFC) Tobacco Growers’ Association, handed over a memorandum to the Periyapatna tahsildar on January 5 and Hunsur Assistant Commissioner on January 6. “We will hand over memorandums to MPs representing Mysuru, Mandya, Chamarajanagar and Hassan, which are tobacco growing regions in Karnataka,” the federation’s general secretary Vikram Raj Urs told The Hindu.

The recent notification issued by the Centre announced the hike in duty on tobacco products from 53% to a whopping 82%, Mr. Urs claimed, adding that the new rules effectively impose an excise duty ranging from ₹2,050 to ₹8,500 per 1,000 sticks, depending on the length of the cigarette and its filter.

The tobacco growers fear that the steep hike in duty will force domestic manufacturers to raise the prices of finished goods, which will in turn lead to a drop in sales and indirectly hurt the supplies from farmers. “This could cause a glut in the tobacco crop market in the near term,” the federation’s president H.G. Paramesh said in a statement.

In the memorandum submitted to the Chief Minister, the federation said the tobacco crop earned a foreign exchange of ₹16,728 crore in 2024–25 while the livelihoods of tobacco farmers, agricultural labourers, warehouse workers, transporters and others employed in the domestic cigarette ecosystem depend on the stability of the domestic cigarette industry.

“We are already suffering under the burden of an extremely high taxation rate on cigarettes (which use FCV tobacco) which on per kg basis is more than 50 times higher than beedis and more than 30 times higher than chewing tobacco, thereby unfairly penalising the VFC tobacco farmers,” the memorandum said.

Apart from the drop in demand for domestic VFC tobacco leaf, the sharp rise in retail prices of cigarettes will lead the consumer to substitution by way of cheaper illicit cigarettes. The availability of smuggled cigarettes at a cheaper price will cause a revenue loss, the federation said.