Tobacco Body Warns Steep Excise Hike Fuels Illicit Trade, Harms Farmers

• Tobacco Institute of India (TII) expresses shock over steep excise duty hike announced on December 31, warning of severe consequences.
• TII states the hike contradicts government assurances of revenue-neutral tax transition and will harm farmers, MSMEs, and legitimate industry.
• The body warns higher taxes will fuel illicit trade, which already accounts for one in three cigarettes, leading to revenue loss for the national exchequer.
• Legal cigarettes contribute 80% of tobacco tax revenue despite being only 10% of total consumption, indicating an already high tax burden.
• TII cites global examples like Australia, where high taxes led to a booming black market, urging the government to reconsider the duty increase.

Why It Matters: Tobacco industry warns steep excise duty hike will boost illicit trade and cripple legal sector.