India’s cigarette market is bracing for a sharp reset after Parliament cleared amendments to the Central Excise Act, altering the way cigarettes are taxed and potentially pushing up retail prices nationwide. While viral claims suggest that a cigarette priced at ₹18 today could soon cost as much as ₹72, government officials have not issued any notification confirming specific retail prices.
What is clear, however, is that the revised excise framework substantially raises the duty burden on cigarettes across categories. Under the new structure, excise is calculated at a higher rate per 1,000 sticks, with slabs linked to length and filter type. Compared with the earlier regime, taxes now form a significantly larger share of the final cost, especially for low-priced cigarettes.
Industry sources say manufacturers are assessing how much of the increased duty can be absorbed internally and how much will need to be passed on to consumers. Any final price revision will also factor in GST, state-level levies and trade margins, making uniform pricing unlikely across markets.
The widely circulated ₹18-to-₹72 figure appears to be based on back-of-the-envelope calculations using the revised duty rates rather than an official price list. Analysts caution that while steep hikes are possible, the actual increase will depend on brand positioning and company strategy. Historically, cigarette makers have opted for staggered price rises rather than sudden jumps to protect volumes.
The government’s move is rooted in a long-standing public health approach that uses taxation to curb tobacco consumption. Higher prices have consistently been shown to discourage initiation among younger users while encouraging existing smokers to cut back. At the same time, tobacco taxes remain a key source of revenue for both the Centre and states.
For consumers, the impact is expected to become visible once manufacturers update their rate cards, which could happen in the coming weeks. Budget brands are likely to feel the pressure first, though premium segments may also see revisions.
While speculation continues online, the final word on cigarette prices will only emerge after companies respond to the new excise regime. Until then, the market remains in wait-and-watch mode, with higher prices all but inevitable, even if the exact numbers are yet to be known.
