The Central Excise Amendment bill, 2025[1] received Presidential assent on the 11th of December 2025 much to the dismay of some 250 million people that comprise of the tobacco consuming population of India[2]. In a nutshell, the government has imposed strict excise duties on all forms of tobacco in an effort to safeguard public health and attempt to slowly lessen the demand for products such as cigarettes, bidis and chewing(smokeless) tobacco.
It is no secret that tobacco products are harmful for one’s health, as there are very well-illustrated and widely known problems caused by these products including cancers, heart diseases, lung diseases and reproductive issues amongst a long list of others that have found their way to negatively impact the people of our country resulting in an estimated 1 million deaths in the nation in 2021, and a glaring loss of 28.9 million disability-adjusted life years in the same year as a direct result of tobacco usage[3]. Moreover, the smoking culture in India has reached a certain point where intervention is needed. Moving away from statistics, one can use the “eye test” to observe that what once used to majorly be disgruntled employees taking a break at work has now turned into the smoking crowd getting younger and younger as the years go on by. One can follow every step that would lead to, in theory, reduction of cigarette consumption, but the core way to fight something that arose out of thin air and something that might simply be pointed to a shift in culture is by tackling availability. Here, this bill hasn’t tackled the production of tobacco, it has tackled the accessibility to it.
The Numbers
This bill is straightforward when it comes to the numbers; unmanufactured tobacco (which is the most consumed form of tobacco in India, comprising of bidis and chewing tobacco) will see an increase in excise duty from 64% to 70% and cigarettes will see a mammoth increase from a price range of Rs. 200-735 per 1000 sticks to Rs. 2,700-11,000 per 1000 sticks which, on the lower end, showcases a percentage increase of 1350% per packet of 20 in terms of excise duty on cigarettes.
Cigarettes have had a price hike of around Rs. 2-5 per individual cigarette, along with whole packets seeing an increase to the tune of 15-20% in price. Moreover, the government’s targeted audience being consumers of bidis and chewing tobacco have also seen a minor increase in the inconvenience of consumption of tobacco with marginal price increases.
Tobacco products in India hold a relative price inelasticity, meaning that a hike in price need not necessarily result in a reduction in demand.Asconcluded in a study conducted by Rijo M John in 2008[4], cigarettes will only see a difference in consumption and demandwhen the new retail price is 150% of the old one. As seen by the first few weeks post implementation, the central excise amendment has so far shown a meagre increase of 10% from the original price. Moreover, even though other forms of tobacco like gutkha and bidi are relatively more price elastic, theytoo are not to see any meaningful decline in consumption due to the fact thattheir price change with respect to the bill is extremely negligible.
MPOWER
The implementation of this bill in the hopes of India having a reduced rate of tobacco consumption has to do with the MPOWER[5] scheme by the WHO. India is following the examples of Brazil, Turkey, Mauritius and The Netherlands (being the only four nations to have implemented all the 6 guidelines of WHO’s MPOWER scheme).
MPOWER, introduced in 2008 is a scheme under the branch of the WHO FCTC (World Health Organisation Framework Convention on Tobacco Control) acting as a package of policy measures that has now become a measuring stick on how countries combat the disastrous health issue that is consumption of tobacco. The scheme’s 6 main guidelines are as follows:
- Monitoring tobacco use.
- Protecting people from tobacco smoke.
- Offer help to quit tobacco.
- Warning about the dangers of tobacco.
- Enforcing tobacco advertisement, promotion and sponsorship bans.
- Raising taxes on tobacco.
With the introduction of this bill, India has attempted to meet the sixth guideline of the MPOWER scheme that requires taxation to be placed at 75% for tobacco products along with “W” and “E” already being followed to an appropriate degree. India has implemented extremely graphic warning signs on packages of all forms of tobacco, something that is the best way to warn consumers about the dangers of tobacco. Moreover, there is a nationwide ban on tobacco advertisement, promotion and sponsorship.
The nation does have a ways to go, as challenges for monitoring tobaccouse seem to be getting better combatted by the day, even with the problem presented in the form of a heavily populated, and extremely diverse nation where outreach towards all sections of society is a near impossible task, implementing regimes like the central excise amendment is an attempt to help indirectly monitor tobacco use as one will be able to look at smoking rates and revenues of popular tobacco companies.
The Culture
Unlike the objective standards set for nations by MPOWER, India’s fight against tobacco will prove to be extremely difficult. It is not as much a policy issue as it is a cultural one. Smoking is nationwide, not speaking to the population of recreational smokers, but to those that have had smoking so deeply enshrined into their daily lives and those of their ancestors, that the idea of a tobacco ban would feel unsecular and an attack on their culture. Further accentuating this is the fact that India is amongst the world leaders for black markets, and that the sheer volume of smokers would be more than enough to warrant a robust under-the-table scheme that sees the bill have a large gap between implementation and real impact.
For the hopeful Indian government to have the confidence in the bill, there would have to have been successful precedents to have the passing of this bill be practical. However, the deeper one investigates Indian legislations that attempted the banning of substances, one sees a common pattern. Considering that this bill speaks of tobacco, we shed light to the exampleof alcohol bans in certain states.
Alcohol has been banned by Bihar, Gujarat and Nagaland. However, the law is loosely followed in all 3 states, just as one would expect. Black marketing will always exist, but even without it, one can observe with the coming up of GIFT city, alcohol withholding regulations have seemed to ease for the reason of promotion of industrialization. Similarly, Nagaland has been a “dry” state for the better part of 4 decades, however regulations are seldom followed to the t. Simply put, any effort of prohibition or reduction of consumption is not enough especially in a nation like India, where even when alcohol is a substance that is extremely well known as a pollutant of the body and the mind as well as declared to be much more dangerous for one’s surroundings compared to tobacco, mixed with the fact that tobacco consumption supersedes alcohol, shows that there isn’t a world where a nation with failed implementation of alcohol bans will be able to survive an attempt to reduce consumption of a much more widely used and reliant substance such as tobacco.
Alcohol bans and the central excise amendment do not have much in common, however with the passing of this bill, and the conversations it forces society to have, one must assume that Indian legislation is headed towards banning tobacco be it 10, 15 or even 20 years from now.
It is not the fact that India will not be able to reach a small victory like they have with alcohol in selective states, the basis of challenging citizens with price hikes to weigh their perceived needs and desires on cigarettes is flawed. Culture is built over eons of time and culture is the one thing that lives on. Indian history showcases deep-rooted cultural and religious symbolism tied in with smoking and with the way the society is currently constructed, one must assume that smoking and the inherency that 1 in every 5 citizens has with the feeling of a tobacco rush, that the Indian population is stubborn, rebellious and will always find ways around legislations.
These price hikes might see the common man face a heavy degree of difficulty to continue with a habit that burns more holes in their pockets than their lungs, however this bill seems like it will soon have more than enough sides to tackle it from. One would assume that even if 15% of tobacco consumers are lost, India would have the second most consumers of tobacco worldwide.
While the intention behind the bill is a great step towards a smokeless nation, it is a goal that is not to be achieved until after a long and slowprocess of a cultural shift. To put it simply, the bill serves its purpose in objectivity, the drafters have tried following every measurable variable to meet the amalgamation of what should lead to the success of the bill, however overlooking the fact that it is the Indian man’s deep cultural infatuation with tobacco, alongside not weighing in the robust black marketing practice in the nation will lead to the bill not being able to meet its goals. While India may see a negligible percentage shift in the population of smokers, it will not be to the degree the government must have hoped for when this bill received assent. So while the central excise amendment poses a forward thinking and health-first approach tackling the ever-prevalent issue of tobacco consumption, it fails to recognize that the nature of the activity being culturally normative, balanced with the relative price inelasticity of consumption of tobacco will play a much larger spoilsport than expected.
REFERENCES:
- https://prsindia.org/files/bills_acts/bills_parliament/2025/Central_Excise_(Amendment)_Bill,_2025.pdf
- https://www.who.int/india/health-topics/tobacco
- https://rsisinternational.org/journals/ijrsi/articles/an-experimental-study-to-assess-the-effectiveness-of-structured-teaching-programme-on-harmful-effects-of-tobacco-consumption-among-male-adolescents-in-selected-area-of-rural-community-of-bareilly-u-p/
- https://academic.oup.com/heapol/article/23/3/200/602289
- https://www.who.int/initiatives/mpower
[1]Central Excise (Amendment) Bill, 2025, Bill no. 143 of 2025
[2]World Health Organisation, Tobacco, WHO India
[3]Meenu Bawari& Diksha Saxena, Structured teaching programme on harmful effects of tobacco consumption
[4]K.S. Rijo M. John, Price Elasticity estimates for tobacco products in India, 23 Health policy and plan. 200, 205 (2008)
[5]World Health Organisation, MPOWER
Author Name- Vir Malik is a 2nd Year B.A.LL.B Student at Gujarat National Law University, Gandhinagar with a deep interest in sports law, alternative dispute resolution, and public policy.
