In view of ambiguity over the government’s order on 85% of cigarette packs be spared for pictorial health warning on tobacco smoking, major cigarettes manufactures including ITC, Godfrey Philips and VST have stopped manufacturing of cigarettes from April 1, 2016 and cautioned the government that the rule will promote illegal cigarettes’ trade in the country.
These tobacco companies pay 98% of the country’s sales duty on cigarettes and the estimated production revenue loss will be around Rs.350 crore per day. In a statement, the manufacturers’ body Tobacco Institute of India (TII) said:”Owing to ambiguity on the policy related to revision of Graphic Health Warnings on tobacco product packs, the members are unable to continue manufacturing cigarettes from April 1, 2016.”
TII Director Syed Mahmood Ahmad said the body had sought clarification from the Ministry of Health and Family Welfare on March 15 but in view of no reply so far, they had to shut down factories and stop production as any miscalculation may lead to rejection of production. “The move will result in an estimated loss of Rs 350 crore per day in production turnover for Indian tobacco industry,” TII explained.
The notification issued by Health Ministry on September 24, 2015, following passage of the Cigarettes and Other Tobacco Products (Packaging and Labeling) Amendment Rules, 2014, made it compulsory to provide 85% space on cigarette packs for pictorial warning. This followed the government’s commitment to Rajasthan High Court on March 28 that the rule will be implemented strictly from April 1, 2016.
TII said the new warning rule will promote illegal cigarette trade and adversely affect the livelihood of 45.7 million people dependent on tobacco which included farmers, labour, workers, trade and others. Moreover, illegal cigarettes account for 20% of the total cigarette industry and the consequent loss to the national exchequer is in the range of Rs 9,000 crore.