The tobacco market in India is expected to grow at a CAGR of 6.3% over FY 2016 to FY 2020, according to Netscribes forecasts. India, being the second largest producer and third largest exporter of tobacco in the world, benefits significantly from the tobacco market in terms of revenue and employment.
A large portion of the Indian economy depends on agriculture, and tobacco is the principal cash crop across many states. Bidi (Traditional cigarettes), snuffs and smokeless tobacco, including gutka, khaini and zarda, are the most popular tobacco-based products. Bidi dominates the tobacco market in India, followed by chewing tobacco and cigarettes.
Key Growth Factors
The tobacco demand and consumption is very high in India, which will continue to be the key driver of growth in the market. This will be followed by demand from countries outside of India. Legal cigarettes contribute to the majority of the tax revenue compared to other tobacco products.
In the Union Budget of 2016-17, the Indian government priced tobacco products very high. Since then, tobacco manufacturing companies have launched more tobacco products under new brands and extensions to increase their sales.
Threats and key players
Increasing regulations in the tobacco industry through taxation and bans on advertising have led to a decline in the sales volume of tobacco products in India. This has been done to curb the health risks associated with tobacco consumption. India bans smoking of cigarettes and bidis in public places, while large pictorial warnings cover 85% of the front and back of all cigarette packs. These are some of the measures taken to discourage the Indian population from consuming tobacco products in the country.
Despite stringent regulations, the tobacco industry has witnessed growth, with ITC, Godfrey Phillips and VST Industries ruling the cigarette market in India.
What’s covered in the report?
- Overview of the Tobacco sector in India and forecasted tobacco market size over 2016 to 2020.
- Trends and Developments in India Tobacco market
- Qualitative analysis of the major drivers and challenges affecting the market
- Comprehensive analysis of the competitive landscape and detailed profiles of major public and private players.
- Get a broad understanding of the tobacco sector in India, its link to the overall tobacco products, the major segmentations of the sector and current state of the same
- Learn about the major tax regulations in the sectors
- Understand major competitors' business, market dynamics, and respond accordingly
- Be informed regarding the key areas of opportunity in the tobacco sector
- Make more informed business decisions with the help of insightful recommendations provided to succeed in the tobacco sector.
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