Hand-Rolled Cigarettes More Expanded in India

Published on April 19th, 2010 09:27

Some people supposed that cigarettes business will increase their income, and this is true. However, most of countries continue to ban smoking, especially foreign cigarettes business. For example after a lot of discussions, at last India has prohibited further foreign direct investment in the cigarette business.

That decision appears be a gasp to the likes of Japan Tobacco and British American Tobacco, which attempted to expand their small attendance in the expanding and increasingly abundant market.

Of course the protectionist movement should come as astonishment, especially given that International Trade Commission (ITC), which has almost 80% of the tobacco market, is 34%-government possessed through state-run insurance companies. And it should give to tobacco companies more time to think if they really are missing out.

In spite of fast growth in available income and heavy migration of people from rural to urban regions, cigarettes remained the first choice of only a small part of Indian tobacco smokers. However, many of them prefer chewing tobacco. Most of Indian smokers smoke hand-rolled leaf cigarettes and only approximately 15% smoke cigarettes.

Indian Hand-Rolled Cigarettes

The state profit from tobacco is not so high, because of competition from contraband cigarettes imported or exported through the borders and unlawful made local smokes. While there are no special opinions of how many of such smokes were spread in the market, ITC declared that they are its biggest problem.

The Health Ministry also voted for curbing smoking. Even before the formal investment ban, the government had refused the proposals by foreign cigarettes to increase their availability in India. Actual rules use licenses to covering the amount of cigarettes a company can manufacture in a year, and there are clear calls for higher cigarettes tax rates for to reduce tobacco use among inhabitants.

The country’s cigarettes tax already is 69%, is one of among the highest percentages in this region, reported the Tobacco Institute of India. And even tobacco makers endure an unequal share of the tobacco tax. While cigarettes represent only about 40% of India’s $12 billion of tobacco market, they produced 80% of the income accumulated from the tobacco company in 2007-08.

Of course, the main tobacco companies hoped to extend their business in India, where cigarette use is increasing around 5% yearly. So, Japan Tobacco is searching for new markets as its domestic market decreased because a declining population and fewer inhabitants continue to smoke. But unfortunately foreign tobacco companies found in India also many defects which can harm their business.

By Kevin Lawson, Staff Writer. Copyright © 2010 TobaccoPub.com. All rights reserved.

Related tags: cigarette | business | smoking | tobacco market | chewing tobacco | smoke | hand-rolled cigarettes

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