Smoking is set to become more expensive in India as the central government announces a fresh tax hike on cigarettes. The new excise duty will come into effect from February 1, according to an order issued by the Ministry of Finance.
Under the revised structure, the government will levy excise duty ranging from ₹2,050 to ₹8,500 per 1,000 cigarette sticks. The tax will vary based on cigarette length. This duty will apply in addition to the existing 40 percent Goods and Services Tax.
At present, cigarettes in India attract an overall tax burden of nearly 53 percent. This figure remains well below the World Health Organization’s recommended 75 percent benchmark. Officials believe the higher excise duty will help bridge this gap and discourage tobacco consumption.
The decision follows the approval of the Central Excise Amendment Bill 2025 in December 2024. The amendment removed the earlier temporary levy and introduced a permanent taxation framework for tobacco products.
The price hike will directly impact millions of smokers across the country. It may also affect cigarette manufacturers such as ITC and Godfrey Phillips India, as higher taxes could pressure sales and margins.
The government aims to reduce tobacco use and related health risks through stricter taxation, while also strengthening public health outcomes.
