Archive · 4 Jan 2026
Tobacco Tax Hike Sparks Farmer Protests
Farmers in India are protesting because the government increased taxes on tobacco products.
They say this will hurt farmers and make legal cigarettes too expensive, leading people to buy smuggled ones.
The farmers' group, FAIFA, says the government promised not to raise taxes too much, but they did it anyway.
They are worried about losing jobs and money because of this.
The government says the tax hike is to make more money and to discourage people from using tobacco.
The farmers want the government to lower the taxes again to help them and stop smuggling.
Farmers' group FAIFA protested in Ongole against the excise duty hike on tobacco products.
The Ministry of Finance increased excise duties ranging from Rs 2050 to 8500 per thousand cigarette sticks, effective from February 1st.
FAIFA argues the hike contradicts the government's earlier assurance of a revenue-neutral transition and will impact farmers in Andhra Pradesh, Telangana, Karnataka, and Gujarat.
The tax hike is expected to widen the gap between legal and illegal cigarette prices, pushing consumers toward smuggled products.
FAIFA points out that India's illicit cigarette market is the fourth-largest globally, with illegal products comprising 26% of total consumption.
- Who
- Farmers' group (FAIFA) and the Indian government
- What
- Protest against excise duty hike on tobacco products
- When
- Protest held on Saturday, tax hike effective from February 1st
- Where
- Ongole, Andhra Pradesh
- Why
- To demand rollback of the tax hike, citing its impact on farmers and the rise of illicit products
Farmers' Group
Government
Tax Hike Impact
Farmers' Group
The excise duty hike will severely impact farmers and push consumers toward smuggled products.
Government
The government aims to increase revenue and discourage tobacco consumption through higher taxes.
Revenue-Neutral Transition
Farmers' Group
The government's tax hike contradicts earlier assurances of a revenue-neutral transition.
Government
The government maintains that the tax hike is necessary for revenue generation and public health.
- Organization
- Federation of All India Farmer Associations (FAIFA)
- Protest Location
- Ongole
- Excise Duty Range
- Rs 2050 to 8500 per thousand cigarette sticks
- Effective Date
- February 1st
- Impacted States
- Andhra Pradesh, Telangana, Karnataka, Gujarat
- Illicit Market Share
- 26% of total consumption
- Cultivation Area Decline
- From 2.21 lakh hectares in 2013 to 1.22 lakh hectares in 2020
- Employment Days Lost
- 35 million
Sources
ITC stock downgraded after excise duty hike
Farmers’ group demands rollback of tobacco tax hike
Farmers’ group demands rollback of tobacco tax hike
Customs rejig must resolve inverted duty, supply chain issues: Arvind Virmani
Brokerage firms flag surge in illicit cigarette trade risks after sharp tobacco tax hike
Tax hike raises risk of smuggling of tobacco products and revenue loss for govt: Experts
Steep cigarette tax hike may boost smuggling, erode revenue as excise overhaul kicks in - Telegraph India
