Tobacco in 2024: The big picture
In 2024, tobacco in India continued to be shaped by regulation, demographic and macroeconomic trends. The industry operates under scrutiny, facing among the highest tax rates across all fmcg, alongside strict laws governing product packaging and marketing. Despite this, India's demographics ensure a vast consumer base: with a median age of 29.4 and massive populations of millennials and Generation Z consumers in 2024. A significant number of new consumers enter the legal smoking age and the workforce annually, maintaining substantial consumption occasions for cigarettes. Economically, India has shown robust post-Coronavirus (COVID-19) pandemic recovery, with real GDP growth easily outpacing consumption; a positive indicator for the market. However, as a developing economy, consumption patterns are distinct: a highly price-sensitive market fuels both the preference for single-stick purchases and high demand for illicit tobacco products across the entire regulated industry.
2024 key trends
Flavour is the primary area for innovation in cigarettes in India; a necessity driven by strict regulatory and legislative restrictions. To cater to India's large and diverse consumer base, companies have widely experimented with different flavour profiles. The most successful form of this innovation is the flavour capsule cigarette. These products use a sophisticated delivery system: crushable beads within the filter that release flavours, such as menthol, spice or other specialties, when activated. Building on this success, manufacturers have also introduced double capsule cigarettes, which combine two distinct flavours for a more unique consumer experience. Capsule formats are popular across both the mid-priced and premium segments. They are especially favoured by the massive younger adult demographic, including huge numbers of millennials and Generation Z consumers, who represent the largest cohorts in the market as of 2024.
Competitive landscape
The competitive landscape of cigarettes in India is dominated by domestic companies, a consequence of the government's 2010 ban on Foreign Direct Investment (FDI), which aimed at regulating consumption. ITC Ltd dominated retail volume sales in 2024 through its diverse portfolio, extensive distribution and strong presence in the mid-priced and premium segments with brands like Gold Flake and Classic. Godfrey Phillips India Ltd ranked second, outpacing category retail volume sales growth since the COVID-19 pandemic by manufacturing Marlboro, using Flue-Cured Virginia (FCV) tobacco and making the brand accessible with the launch of affordable Marlboro Advance. VST Industries Ltd ranked third, leveraging a strong regional presence in shorter 64mm and 69mm segments, but it has been losing retail volume sales due to weaker demand in its core sub-INR10.00 segment.
Retail developments
The structure of India's developing market dictates that small local grocers (paan shops/kiosks) remain the primary sales channel. This is reflected in consumer behaviour, particularly the prevalence of single-stick purchases. Buying individual sticks, rather than a full pack, is highly popular because it offers affordability and, for some, helps limit overall consumption. These traditional grocery outlets are thus crucial for single-stick sales, unlike modern retail stores, where only full packs are sold.
What next for tobacco?
In September 2025, the Indian government revised GST rates across several areas of fmcg. However, for tobacco, the GST rate was raised from 28% to 40%. While the new rates for most industries took effect on 22 September 2025, the changes for tobacco products will come into force in 2026. This tax increase is expected to drive up prices and potentially dampen legal cigarette sales in India.
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Overview:
Understand the latest market trends and future growth opportunities for the Tobacco industry in India with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
- Cigarettes
- Cigars, Cigarillos and Smoking Tobacco
- Smokeless Tobacco, E-Vapour Products and Heated Tobacco
If you're in the Tobacco industry in India, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
The Tobacco in India report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volume and value sizes, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent research methodology, conducted in-country
This report answers:
- What is the market size of Tobacco in India?
- Which are the leading brands in Tobacco in India?
- How are products distributed in Tobacco in India?
- Which category is the most heavily taxed in India?
- How is the operating environment for Tobacco changing?
- What are the current legislative restrictions applicable to the sale of Tobacco products in India?
- How has COVID-19 impacted demand?
- How have national lockdown and enforced home seclusion following COVID-19 impacted sales?
- Where is future growth expected to be most dynamic?
Tobacco in India
Tobacco in 2024: The big picture
2024 key trends
Competitive landscape
Retail developments
What next for tobacco?
Legislation
Legislative overview
Minimum legal smoking age
Smoking prevalence
Health warnings
Plain packaging
Advertising and sponsorship
Point-of-sale display bans
Smoking in public places
Flavoured tobacco product ban
Vapour products
PRODUCTION/IMPORTS/EXPORTS
DISCLAIMER
Cigarettes in India
KEY DATA FINDINGS
New products, moderate price hikes and increased office occupancy drive cigarette volumes
Godfrey Phillips India outpaces average retail volume growth in cigarettes through successful localisation and affordability strategies
The government’s proposal to implement a track-and-trace (T&T) system is expected to help curb sales of illicit cigarettes in India
Retail volume sales growth of cigarettes is expected to slow amidst inflation and regulation
Companies to continue driving innovation through flavour capsule cigarettes
E-commerce, on the back of quick commerce, is expected to be the fastest-growing distribution channel
Taxation rates
Average cigarette pack price breakdown
Cigars, Cigarillos and Smoking Tobacco in India
KEY DATA FINDINGS
Ambience and distribution are key growth drivers in emerging cigars and cigarillos in India
Manufacturers see uniform taxation as the biggest impediment to sales of cigars and cigarillos
Players are set to focus on premiumisation and addressing consumer perceptions
Legal access to hookah, particularly through hookah parlours, is banned in many states, but the products remain readily available at small local grocers and tobacconists
Smokeless Tobacco, E-Vapour Products and Heated Tobacco in India
KEY DATA FINDINGS
Unorganised marketplace and unethical practices drive smokeless tobacco in India
The government implements a ban on e-vapour products to prevent the category from becoming mainstream
The ban on Electronic Nicotine Delivery Systems (ENDS) spells the end for heated tobacco products in India
Smokeless tobacco escapes the impact of regulation and legislation to some extent
Illicit e-vapour products continue to be an issue for the government
The following categories and subcategories are included:
Tobacco
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- Fine Cut Cigarettes
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- Cigarettes (Illicit+Legal)
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- Cigars
- Cigarillos
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- Pipe Tobacco
- Fine Cut Tobacco
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- Chewing Tobacco
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- Loose US-Style Moist Snuff
- Portion US-Style Moist Snuff
- Swedish-Style Snus
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- Closed System Single Use
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- Closed System Rechargeable (including starter kits)
- Closed System Cartridges
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- Open Vaping Systems Charging and Vapourising Devices
- E-liquids
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- Tobacco Heating Devices
- Heated Tobacco
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- Nicotine Pouches
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- Closed System Single Use (Illicit+Legal)
- Closed System Cartridges (Illicit+Legal)
- E-Liquids (Illicit+Legal)
Tobacco
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
See all of our definitionsWhy buy this report?
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This report originates from Passport, our Tobacco research and analysis database.
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