Tobacco taxation policy in India: public health considerations

The Indian government announced revised excise duty on cigarettes in the Union Budget commencing Feb 1, 2026 to deter the masses from tobacco use.¹ This move reflects India's long-term commitment to tobacco control measures especially in times when the country bears one of the highest global burdens of lip and oral cavity cancers and other tobacco related diseases.² However, the effort might prove short-sighted if the policies fail to provide strategies to address addiction biology, possible substitutes (such as bidis, gutkha, khaini, zarda, loose tobacco etc.), and necessary medical and rehabilitation facilities including nicotine replacement therapies, behavioral counselling, and structured tobacco cessation clinics. In low- and middle-income countries where affordability drives product selection, the unintended public health consequences may include increased substitution to smokeless tobacco products and bidis, potentially sustaining overall tobacco exposure.

Nicotine, the active compound in cigarettes reinforces compulsive use and contributes to withdrawal symptoms on habit cessation by hacking the neurobiological mechanisms involving acetylcholine receptors and mesolimbic dopaminergic reward system.³ As conventional cigarettes become more expensive and unaffordable, nicotine dependent individuals especially from socio-economically weaker sections (lower income households, rural population, informal sector workers) and other disadvantaged groups might shift to cheaper alternatives like bidis, self rolling tobacco, or other smokeless tobacco products like gutkha, khaini etc. which remain widely accessible in India.⁴ Such substitution effects might blunt the intended impact and dissuade the efforts behind policy change and sustain nicotine consumption in one way or another.

According to GLOBOCAN 2020, India reported approximately 135,000 new lip and oral cavity cancer cases, highlighting Indias contribution to oral cancer burden with nearly one-third of all global cases, and almost 40% of national cancer cases pertaining to tobacco use.² It is important to note that smokeless tobacco consumption confers a substantially elevated risk of oral cancer (Relative risk of 4.44; 95% CI = 3.51–5.61)⁵ and is strongly associated with oral submucous fibrosis, an established potentially malignant condition.⁶ Cigarette price rise may inadvertently drive the population towards these products and instead of a reduced burden, India might witness an exacerbation of oral diseases and associated malignancies in the future. Notably, other low- and middle-income countries where differential pricing exists have reported increased illicit trade, substitution or down trading patterns following increased taxation on tobacco.⁷

There also exists a real risk of illicit trade of tobacco products that can undermine both public health objectives and economic regulation. Despite existing stringent policies and prohibitions, like the COTPA (Cigarette and Other Tobacco Products Act, 2003), there has been a gradual shift towards electronic nicotine delivery systems, which further draws attention to recurring patterns of adaptive behaviors by nicotine dependent individuals opting a substitute rather than cessation when access is restricted.⁸ Recent evidence suggests that although tax-induced price hike can dissuade cigarette smoking, supplementary measures including accessible rehabilitation services are deemed crucial to maximize public health benefit along with monitoring market response and industry tactics that potentially undermine tax policies.^9,10 In this context, it is prudent that fiscal interventions be accompanied with evidence-based cessation support along with stringent monitoring of substitute products and illicit trade.

Contributors

RA conceptualised the commentary, conducted literature review, wrote the first draft and revised it.

Declaration of interests

The author declares no competing interests.