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Though tobacco has a lot of negative impacts on society, yet it is helping Indian tobacco economy in its surge. The tobacco economy in India is large compared to most other countries Tobacco is one of the world's most economically significant agricultural crops which is a drought tolerant, hardy and short duration crop which can be grown on soils where other crops cannot be cultivated profitably. India is the 2nd largest producer and exporter after China and Brazil respectively. Major tobacco-producing states in India include Gujarat, Andhra Pradesh, Uttar Pradesh, Karnataka, West Bengal, Telangana, and Bihar. Gujarat, Andhra Pradesh, and Uttar Pradesh contribute around 45%, 20%, and 15% to the country's total production, respectively. Karnataka follows with approximately 8%, while the remaining states collectively account for about 2-3% of the nation's total tobacco production.
In fiscal year 2021, the area under cultivation for tobacco was 360 thousand hectares in India. This was a decrease as compared to the previous fiscal year when the area under cultivation for tobacco was 400 thousand hectares. In fiscal year 2021, the production volume of tobacco was 760 thousand metric tons in India. This was a decrease as compared to the previous year when the production volume was 800 thousand metric tons.
In 2024, well over 44 million pieces of smoking tobacco products were consumed in India. A decreasing trend in the consumption of smoking tobacco products has been observed since 2018 and the consumption is likely to decrease further in the coming years. About three million cigars were consumed in India in 2024. The cigar consumption trend is forecast to increase in the coming years. Rocky Patel Cigars, Ashton Cigars, and Saga Series Cigars are some popular brands in the country
In fiscal year 2022, the gross value added for food products, beverages, and tobacco amounted to over 2.3 trillion Indian rupees. This was an increase as compared to the previous fiscal year when the GVA amounted to 2.1 trillion Indian rupees.
The Indian tobacco market reported revenue of over 13 billion U.S. dollars in 2024. The market revenue is likely to increase in the coming years to about 17 billion dollars. The tobacco products include cigarettes, smoking tobacco, cigars, and e-cigarettes. The export value of manufactured tobacco from India amounted to more than 395 million U.S. dollars in the fiscal year of 2024. Moreover, there were over one billion dollars of unmanufactured tobacco exported from the country. Tobacco cultivation provides livelihood security to around 36 million people in India, including farmers, farm labourers, and workers in processing, manufacturing, and exports. Bidi rolling alone employs around 4.4 million people, and 2.2 million tribals are engaged in tendu leaf collection
Negative impacts
Tobacco use impoverishes families, impacts their well-being, increases inequalities, and damages both the society and the economy. More than 1 million adults die each year in India due to tobacco use accounting for 9.5% of overall deaths.
Soil Depletion: Tobacco rapidly depletes soil nutrients, requiring more fertilisers which further harm soil quality.
Deforestation: Tobacco production contributes to deforestation, requiring significant wood for processing. Up to 5.4 kg of wood is required to process 1 kg of tobacco.
Waste Generation: Production and consumption of tobacco creates a massive waste burden (1.7 lakh tonnes annually in India).
Economic Burden: Tobacco use leads to immense healthcare costs (estimated INR 1.7 lakh crore loss in India, 2017-18) exceeding the national health budget (INR 48,000 crore). Over 6 million people working in the tobacco industry are at risk due to tobacco absorption through the skin, leading to potential health issues.
Prof Mithilesh Kumar Sinha
Senior Professor
Department of Economics
Nagaland University, Lumami