Tobacco Cultivation in India

Second in the world, on both counts

India is the world’s second-largest tobacco producer, behind only China. It is also the world’s second-largest exporter of unmanufactured tobacco, after Brazil.

One regulator since 1976

The Tobacco Board has overseen the crop since 1976, under the Tobacco Board Act. It is based in Guntur, Andhra Pradesh, right in the middle of the country’s main FCV belt.

Gujarat leads overall, Andhra Pradesh leads in FCV

Gujarat produces about 45% of India’s total tobacco, more than any other state. That output is mostly chewing and bidi tobacco. Andhra Pradesh leads specifically in Flue-Cured Virginia (FCV) tobacco, the cigarette-grade type that drives most of India’s tobacco exports. Karnataka and Uttar Pradesh are also significant producers.

One law covers both belts

COTPA, the Cigarettes and Other Tobacco Products Act of 2003, restricts tobacco advertising and public smoking across the country. It also underpins India’s 85% pack-warning rule.

60% pictures, 25% text

Since 2016, pictorial-and-text health warnings covering 85% of a tobacco pack’s main display area have been mandatory. The rule breaks down as 60% pictorial coverage plus 25% text coverage, among the strictest such rules anywhere in the world.

Bidding in rupee-one steps

The Tobacco Board introduced e-auctions for FCV tobacco in 2012. Buyers bid in ₹1 increments on Hand-Held Terminals, while growers watch the live bidding on floor-side electronic displays. Once a lot sells, payment reaches the farmer’s bank account by RTGS or NEFT within nine days.

Two ministries, two goals

Trade and commerce ministries value tobacco’s export earnings. Health policy, at the same time, actively discourages its consumption. Rising GST and a new per-stick excise duty now function as both a revenue tool and a health lever, pulling in the same direction for once.

A committee that mostly exists on paper

India has state-level guidelines against tobacco-industry interference in 22 states and union territories. These follow a WHO framework called FCTC Article 5.3. But a July 2026 WHO report found only 6 of the states it studied actually had an active committee. India ranked 43rd on the 2023 Global Tobacco Industry Interference Index. That’s a real gap between having a policy and enforcing it.

Usage fell, but the data is old

India’s national tobacco-use survey, GATS, found overall adult use at 34.6% in 2009-10. By the second round in 2016-17, it had fallen to 28.6%, a genuine six-point drop after COTPA and the pack-warning rules took hold. No GATS-3 has been conducted since. The most recent nationally representative figure is now about nine years old.

Tobacco moves to the 40% slab

Since 1 February 2026, tobacco products sit on a new 40% GST slab. This came in under a wider tax overhaul called “GST 2.0.” A new per-stick excise duty applies too, and it varies by cigarette length. Short unfiltered cigarettes carry a duty of ₹2,050 per 1,000 sticks. The longest premium filtered cigarettes, over 75mm, carry up to ₹8,500 per 1,000 sticks. This new structure replaced the old 28% GST-plus-cess regime. That switch happened once Covid-era cess loans were fully repaid, on 31 January 2026. The government says the total tax burden stays roughly unchanged. See GST Council and Rate Rationalisation for the wider GST 2.0 overhaul.

Exports up 166% in a decade

On 10 July 2026, a Commerce Ministry team reviewed Andhra Pradesh’s FCV tobacco season in Hyderabad. They discussed Tobacco Board restructuring, a Growers’ Welfare Fund, and AI-based grading. The same official returned on 26 July 2026. He met Chief Minister N. Chandrababu Naidu and visited the Tobacco Board’s auction platform at Vellampalli.

A 28 July 2026 Lok Sabha reply gave fresh export numbers. Total tobacco exports reached 368.85 million kg, worth ₹17,192.04 crore. That’s up 166.51% in value and 53.10% in quantity over the past decade. FCV farmer prices reached ₹251.14 per kg, up 86.82% from ₹134.43 per kg a decade earlier.