Cigarette prices jump as new excise regime kicks in, stoking smuggling fears

Cigarette prices have risen sharply after a new excise duty regime came into force, with a pack of 10 sticks now costing at least Rs 22–25 more than before, distributors said.

The increase follows the government’s decision to raise taxes on cigarettes for the first time in nearly seven years, a move aimed at aligning India’s tobacco taxation more closely with global public health norms. The new levies, approved by Parliament in December, replace the GST compensation cess framework that has been in place since the rollout of the Goods and Services Tax (GST) in July 2017.

Price hikes vary by cigarette length and category. According to distributors, premium 76 mm cigarettes are expected to cost ₹50–55 more per pack of 10 sticks, depending on the brand.


While manufacturers are yet to issue revised maximum retail prices (MRPs), distributors have begun billing existing stock to retailers under the new 40% GST rate. With wholesale markets closed on Sunday, industry participants expect fresh stock bearing updated MRPs to be lifted from Monday.

Citing distributors, news agency PTI reported that Wills Navy Cut (76 mm), earlier priced at Rs 95 per pack of 10 sticks, is expected to retail at around Rs 120. 84 mm cigarettes—including Gold Flake Kings and Lights, Wills Classic and Wills Classic Milds—currently priced at Rs 170 per pack, are expected to rise to Rs 220–225. Slim cigarettes such as Classic Connect (97 mm), priced at Rs 300 for a pack of 20 sticks, could see MRPs increase to around ₹350, the report said.

Distributors, however, warned that steep price hikes could fuel smuggling and the spread of counterfeit products. The All India Cigarette and Tobacco Distributors Federation (AICPDF) estimates there are 8,000–9,000 stockists of cigarettes and tobacco products across the country.

“Some companies have already put their stocks on hold. They will start releasing them after billing under the new tax structure,” a stockist told PTI.

“Tobacco products are among the few categories where small shopkeepers are still relevant. If this too is pushed into the hands of illicit networks, what will be left for honest retailers? This is not just about taxation—it is about survival,” he added.

From February 2026, cigarettes and tobacco products will attract additional excise duty and cess over and above the highest 40% GST slab, replacing the current structure of 28% GST plus compensation cess. The Central Excise Act has also been amended to impose a per-stick excise duty, with rates linked to cigarette length. (With inputs from TOI)