India’s GDP grew by 5.3% in the fourth quarter of fiscal year 2012, recording its worst performance in last nine years. This slowdown in growth was primarily a result of high inflation, high interest rates, and policy paralysis.

Indian tobacco industry also suffered a slowdown as index of industrial production for mining contracted by 4 percent year on year in fiscal 2012.

This report presents the status of tobacco industry in India, with discussion on the production, economic, legal and socioeconomic issues of the industry.

Today, India accounts for 3.6% of the Asia-Pacific tobacco market. Survey estimate that there are 274.9 million tobacco smokers are currently in India, representing more than 35% of the adult population. There 163.7 million smokeless tobacco users in the country, while 68.9 million are only smokers.

About 42.3 million adults consume both use cigarettes and smokeless tobacco products in India.

Bidis, along with smokeless tobacco account for 81%of the Indian tobacco market.

According to The Global Adult Tobacco Survey (GATS) data, tobacco consumption amongst women in India have doubled in five years, from 11.5% in 2005 to 20.3% in 2010, while it dropped in men from 57.6% to 47.9% during the same period.

The report revealed widespread tobacco use among youth, with more than 15 percent of youngsters under the age of 15 years, and nearly 25% of those between 15 to 17 years consuming tobacco. The figure for those in the 18 to 19-age bracket was 19%.

In India, tobacco consumption is responsible for 65% of all the cancer in men and 33% of all cancers in women according to the World Health Organization.

Over the years India’s health ministry has worked on various measures for tobacco control including restrictions on advertising and sales to minors, a ban on smoking in public places, and pictorial warnings on tobacco products, as it moves forward in meeting its WHO Framework Convention on Tobacco Control (FCTC) obligations.

Key trends in the Indian tobacco market

Demographic and economic trends

• Increasing wealth and a large young population base are driving demand
• Opportunities in rural markets

Consumer trends

• Rising consumption of chewing tobacco among teenagers
• High chewing tobacco and bidi consumption pose challenges for cigarette manufacturers
• Varying consumption patterns, by demographic
• Lifestyle trends are pushing growth in the cigars and cigarillos and cigarettes categories
• Estimated 55.6% of the total market value contributed by chewing tobacco segment in 2011.
• More than 274.9 million or 35% of the adult population in India are tobacco users.

Industry trends

• India is the second largest consumer and producer of tobacco in the world after China.
• Ban on foreign direct investment
• Increasing smuggling of tobacco products
• Regulation of the Indian tobacco market
• Product availability at different price points
• Maharasta to become first state to root out tobacco cultivation
• Market trend show an increasing push towards taxation and regulation in the coming years. This will be a driving force for expanded tobacco in products other than cigarettes.

These are only a few of the findings in the new India Tobacco Industry report. Learn more and purchase now>>