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Tobacco exports increased by 166% in 10 years, India became the world’s second largest producer. India’s Tobacco Exports Surge 166 Percent In 10 Years Second Largest Producer

Rahul Kumar | July 28, 2026 5:22 PM CST

Export of tobacco and tobacco products has increased by 166% in the last 10 years. The government said that India has now become the second largest tobacco producer in the world after China. During this period, the income of farmers has also increased by 86.82%.

New Delhi [भारत]July 28 (ANI): In the last ten years, exports of tobacco and tobacco products have grown by about 53.10 per cent in quantity and about 166.51 per cent in value, the government has informed Parliament.

The Ministry of Commerce and Industry, in a written reply submitted by Union Minister Piyush Goyal in the Lok Sabha, highlighted that the shipment increased to 368.85 million kg (₹ 17,192.04 crore or USD 1,948.98 million) from 240.93 million kg (₹ 6,450.66 crore or USD 958.68 million). These figures make India the second largest producer of tobacco in the world after China.

Government took steps in the interest of farmers

To support the priority sector, the government took several measures to protect the interests of flue-cured Virginia (FCV) tobacco growers. These measures included "promoting Good Agricultural Practices (GAP) to improve productivity and quality through supply of quality seeds developed by the National Research Institute for Commercial Agriculture (NIRCA), and fixing authorized crop sizes annually in consultation with stakeholders to align production with market demand and promote price stability."

The reply further stated that “the electronic auction platform has also been strengthened to ensure transparent price discovery and timely payments to farmers.” With these market interventions, the average price received by FCV tobacco farmers increased from Rs 134.43 per kg to Rs 251.14 per kg, showing an overall increase of 86.82 per cent.

farmer welfare schemes

Apart from agricultural assistance, welfare initiatives were also provided directly to the farming community. Under the Tobacco Board Growers Welfare Scheme, more than 1,300 growers were benefited during 2025-26 by providing financial assistance for natural and accidental deaths, medical treatment, education, marriage and repair of tobacco barns damaged by natural calamities.

Control on illegal trade and tax evasion

The ministry said that to curb illicit trade and tax evasion in the sector, "the Government has introduced capacity-based levy for specified tobacco products under Central Excise, effective from 01.02.2026. Under the Goods and Services Tax regime, Rule 31D has been inserted in the Central Goods and Services Tax Rules, 2017, with effect from 01.02.2026, providing for levy on the basis of retail selling price to ensure tax collection at the first stage of supply." But there is a provision for evaluation.”

For better monitoring, the facility of zero-rated supply of tobacco products on payment of Integrated Goods and Services Tax was withdrawn, along with refund of such tax. Manufacturers of pan masala, tobacco and similar goods were required to declare production capacity, machinery and actual production on a monthly basis.

Further, "Section 148A has been inserted in the Central Goods and Services Tax Act, 2017 to enable a track and trace mechanism for evasion-prone goods, with Section 122B prescribing penalties for non-compliance, thereby strengthening enforcement against tax evasion." (ANI)

(Except for the headline, this story has not been edited by Asianetnews Editorial staff and is published from a syndicated feed.)