FAIFA Demands Rollback of Tobacco Tax Hike, Cites Farmer Distress & Illicit Trade Risk

• FAIFA urges government to reverse recent excise duty hike on tobacco products, effective February 1, citing negative impact on farmers and industry.
• The hike contradicts the GST 2.0 assurance of revenue neutrality given in September 2025, where GST was promised at 40% of retail sales price with unchanged overall tax incidence.
• Farmers' body warns the steep tax increase will lead to reduced sales, hurting farmer supplies, creating a market glut, and crushing FCV tobacco growers.
• FAIFA highlights India's tobacco tax regime is already discriminatory against FCV tobacco from Andhra Pradesh and Karnataka, with cigarettes taxed significantly higher than bidis and chewing tobacco.
• The organization fears the hike will make legal products unaffordable, driving consumers to illicit channels and exacerbating India's position as the fourth-largest illicit cigarette market.

Why It Matters: FAIFA demands rollback of tobacco tax hike, warning it harms farmers, contradicts GST promises, and fuels illicit trade.