Cigarettes after tax: The post-February crisis, and how smokers are reacting
Times of India
by MANYA JAINFebruary 25, 2026
AI-Generated Deep Dive Summary
The recent surge in cigarette prices across India, triggered by a new tax regime implemented on February 1, has led to widespread confusion and chaos. Smokers are encountering vastly different prices for the same pack of cigarettes, even on the same street, as retailers and wholesalers navigate the complexities of the updated tax structure. The government's aim to curb tobacco use through increased taxes has instead revealed underlying economic vulnerabilities in the supply chain. This situation underscores how policy changes can inadvertently create new challenges, as businesses adjust to higher costs and shifting margins.
The hike in cigarette prices is part of a broader public health initiative known as India’s 2026 tobacco overhaul. The tax reforms, which include a significant increase in excise duties and the introduction of a National Health Cess, have dramatically altered the market landscape. After implementation, taxes now account for approximately 66% of the retail price of cigarettes, up from about 55%. This shift has led to wholesalers hoarding stock, retailers charging varying prices to different customers, and the emergence of non-compliant foreign brands entering the market through porous borders.
The scale of India’s tobacco problem is staggering. According to
Verticals
worldasia
Originally published on Times of India on 2/25/2026