A Ban on Selling Loose Cigarettes in India Won't Be Effective - Here's Why

States like Karnataka, Maharashtra have imposed such a ban and have been largely unsuccessful.

In 2004, public smoking was made a punishable offence.

(Photo: The Quint)

In a historic move, New Zealand's Parliament passed a law on Tuesday, 14 December, barring people born after 2008 from purchasing cigarettes or tobacco products in the country.

Now, a Parliamentary Standing Committee has reportedly proposed a ban on the sale of loose cigarettes across India in order to curb tobacco use.

While highlighting the risk of cancers due to tobacco consumption, the panel said tobacco in different forms accounts for nearly 50 percent of all cancers.

The panel also recommended doing away with smoking zones at all airports in the country.

However, is it possible to impose such a ban? And what are the problems in enforcing such a ban? The Quint answers.

Tobacco Shares Remain High Despite News of Impending Ban

According to a study, in India about 75 percent of all cigarettes are sold as single sticks. The logic behind this is that cigarettes are more affordable when they are sold loose than when sold only in packs.

However, news of an impending ban on sale of loose cigarettes failed to deter investors. In fact, ITC Limited, the leading cigarette-maker in India, hardly saw any impact on its share prices.

ITC Limited's stock was trading at ₹341.65 on the NSE on Monday, 12 December. Similarly, the share prices of other tobacco companies like Godfrey Phillips India and NTC Industries remained unchanged.

'Impossible to Impose Pan-India Ban'

A major reason behind investor confidence is the impracticality of enforcing such a ban.

A former distributor of ITC Limited's products in New Delhi told The Quint that it is not practical to enforce a pan-India ban on the sale of loose cigarettes.

"It's not feasible at all because of the scale of such small shops and stalls that sell cigarettes and tobacco products" he said.

"The district where my office was based alone had 2,200 such stalls. How does the police and authorities plan to keep a tab on everyone in case such a ban is enforced?," he added.

Sthanu Nair, a professor IIM, Kozhikode, and has written a paper on the affordability of cigarettes and other tobacco products in India, also echoed the same views.

"A pan-India ban is not really practical, and especially in small-towns, areas. Will the government devise a mechanism where they will go and check if every small shop will abide by the ban? Also, imposing a ban will lead to an increase in illicit products flooding the market," Nair told The Quint.

Illegal Cigarettes in India

PC Jha, former Chairman, Central Board of Indirect taxes and Customs and Advisor, FICCI Committee Against Smuggling and Counterfeiting Activities told The Hindu Business Line that only 8 percent of the total tobacco is consumed as legal cigarettes.

The remaining, he added, is consumed through 29 tax evasion-prone products such as bidis, chewing tobacco, khaini and illegal cigarettes.

According to Euromonitor International, the volume of illegal cigarettes in India was estimated to be at 26.8 billion sticks in 2021. In fact, India is the fourth largest illicit cigarette market in world.

"Banning things only leads to taking the illegal route to acquiring them. And some of the cigarettes in the illegal market maybe of even inferior quality thereby causing more damage to the well-being of an individual," added Nair.

In fact, according to the Directorate of Revenue Intelligence, during COVID 19 pandemic, cigarettes have been one among the sought after products smuggled into India owing to the large profit margin.

The growth in illegal cigarette trade, according to a Federation of Indian Chambers of Commerce & Industry-CASCADE study, causes revenue losses of more than 15,500 crore per annum to the exchequer.

The Economic Burden on the Government

According to the a 2021 report prepared by the International Commission to Reignite the Fight Against Smoking, India has the second highest number of 16-64-year-old smokers (2,500,021,33) in the world.

According to the Indian Council for Medical Research (ICMR), in 2020 tobacco-related cancers accounted for 27 percent of the country’s cancer burden.

Such figures create an enormous economic burden for the government.

In fact, the Economic Cost of Diseases and Deaths Attributable to Tobacco Use in India study by the World Health Organisation (WHO) estimated that the economic cost of tobacco was about 1 percent of the total GDP in 2017–18.

The study found that India spends 5.3 percent of its total private and public health resources on treating tobacco-related diseases each year.

Campaigns By Govt to Discourage Tobacco Consumption

On its part, the government has tried several campaigns, and initiatives to discourage tobacco consumption.

The government made it mandatory for manufactures to use large, graphic images of tobacco-related diseases on tobacco products, including cigarettes.

Earlier this year, the Union Health Ministry also that announced tobacco products manufactured, imported, or packaged on or after 1 December 2022 will now have to display an image with a warning written on its pack that states "Tobacco causes painful death".

In 2004, public smoking was made a punishable offence. In fact, even the ban on the sale of loose cigarettes is not something new.

States, including Maharashtra, Chhattisgarh, and Karnataka have banned loose cigarettes.

But the ban has proved to be ineffective in the long-term, with the sale of loose cigarettes continuing at paan and tea shops across the country.

Why Have Bans Proven to Be Ineffective?

While looking into bans, one cannot overlook the liquor ban in Bihar and Gujarat and the reasons behind why it has proven to be largely ineffective.

In 2016, Bihar prohibited the manufacture, sale, and consumption of liquor in the entire state. However, the state has continued selling alcohol in the black market and the sale of spurious liquor has increased. In fact in the latest incident involving spurious liquor in the state's Saran district, 39 people have lost their lives.

“Liquor has become god in Bihar. It is present everywhere in the state, but nobody can see it,” Union Minister Giriraj Singh said recently.

In October, the Patna High Court observed that the lives of people of the state have come under risk because of the state government’s failure to effectively implement its prohibition law.

It has also caused considerable revenue losses to the exchequer.

There can be no guarantee that a similar ban on sale of loose cigarettes will also work, added Nair.

In July, 42 people died in Gujarat after drinking bootlegged booze.

"There is no guarantee that a ban will lead to less consumption of cigarettes," said Nair.