Tobacco Market in India 2017

Updated On: 20 February, 2019 | No of Pages: 60-70 | Format: PDF | SKU: 201878
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Market insights:

India is the second largest producer and third largest exporter of tobacco in the world. The tobacco industry provides employment to ~46 Mn people. With the evolving facilities provided by the Tobacco Board of India, the market has recorded a total (manufactured and unmanufactured tobacco) export of INR 60.13 Bn in 2016.

Tobacco Market in India 2017

Segment-wise market insights:

In India, tobacco is harvested mainly in two forms—cigarette tobacco and non-cigarette tobacco. Manufacture of cigarette tobacco has significantly reduced, globally, leading to an increase in the sale of non-cigarette tobacco.

Chewing tobacco accounted for 38% of the tobacco market in FY 2016, whereas bidi and cigarettes together accounted for rest of the market share. Bidis, snuff and chewing tobacco such as gutka, khaini and zarda accounts for majority of India’s total tobacco production. 

Considering the consumption-tax revenue ratio of the overall segment of smoked tobacco, legal cigarettes account for ~10% of consumption and ~86% of tax revenues. This implies that even though smokeless tobacco has the highest rate of consumption, more revenue is earned from legal cigarettes. Tobacco, despite it triggering addiction and intoxication, is consumed significantly by Indians, especially in the form of smokeless tobacco.

Among the major cigarette producers in India, ITC Ltd. currently enjoys the highest market share (~84.27%), based on sale. Rest of the share is distributed among minor companies like Kothari Products Ltd., Godfrey Phillips India Ltd., VST Industries Ltd., and others.

Market drivers:

  • Over the years, tobacco has become an essential part of the Indian socio-cultural environment, especially in the eastern, northern, and north-eastern parts of the country. A relatively higher income growth compensates for the increasing price of cigarettes, leading to greater consumption. Moreover, societal influences such as peer pressure also aids in driving the demand for tobacco products. These are the crucial factors propelling market growth.
  • With the assistance of the Tobacco Board, Indian tobacco producers are using technologically advanced threshing plants and re-drying factories. These facilities are used for increasing the yield of Flue-Cured Virginia (FCV) tobacco, which can then be exported to different countries, across the world. Hence, improved infrastructure drives growth for this market.  

Market challenges:

  • Cigarette taxes (64% excise duty, 28% GST, and 5% cess) in India are among the highest in the world. Therefore, high tax rates make cigarettes unaffordable to a large section of consumers. As a result, they shift towards the consumption of beedi and other forms of smokeless tobacco. Hence, the overall tobacco market experiences slow growth.
  • The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act of 2003 (COTPA, 2003) imposes a blanket ban on tobacco advertising. This prevents companies from directly advertising their products, because of which they resort to surrogate advertising. Hence, it becomes difficult for manufacturers to promote their brands, limiting the growth of the domestic market.

Companies covered:

  1. Ashok and Company Pan Bahar Ltd.
  2. Godfrey Phillips India Ltd.
  3. Golden Tobacco Company Ltd.
  4. ITC Ltd.
  5. National Tobacco Company of India Ltd.
  6. Pataka Industries Private Ltd.
  7. Sinnar Bidi Udyog Ltd.
  8. VST Industries Ltd.

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Estimated Delivery Time: Immediate Dispatch

Introduction

Slide 1: Executive Summary 

Socioeconomic Indicators

Slide 2: Total Population (2010-2011 – 2019-2020), Population Density (2010-2011 – 2019-2020)

Slide 3: Sex Ratio (2005, 2010, 2015, 2020), Population by Age Group (2005, 2010, 2015, 2020), Urbanization Trend (2010-2011 – 2019-2020)

Slide 4: Total Fertility Rate (2005-2010, 2010-2015, 2015-2020), Infant Mortality Rate (2005-2010, 2010-2015, 2015-2020), Total Number of Births (2005-2010, 2010-2015, 2015-2020), Total Number of Death (2005-2010, 2010-2015, 2015-2020)

Slide 5: Total Literacy Rate (2001, 2011), Rural Literacy (2001, 2011), Urban Literacy (2001, 2011)

Slide 6: GDP at Market Prices (2010-2014), FDI (2010-2014), Inflation Rate (2010-2014), Unemployment Rate (2010-2014)

Slide 7: Access to Safe Drinking Water (2001, 2011), Exchange Rate (2010-2015)

Market Overview

Slide 8: Market Definition and Structure

Slide 9: Market Size & Growth Forecast (Value-Wise; FY 2016 - FY 2020e) and Current Market Scenario

Slide 10: Export Earnings

Slide 11: Product Wise Segmentation (2015-16) & Market Share of Illegal Cigarettes (2014-15)

Slide 12: Consumption Share (2015-16) & Tax Revenue Share (2015-16)

Slide 13: Geographic Segmentation

Slide 14: Porter’s Five Force Analysis

Trade Analysis

Slide 15 – Export of Tobacco and Manufactured Tobacco Substitutes {Value-Wise; FY 2013 – FY 2016-2017 (Apr-Dec)} and Import of Tobacco and Manufactured Tobacco Substitutes {Value-Wise; FY 2013 – FY 2016-2017 (Apr-Dec)}

Slide 16 - Export of Tobacco and Manufactured Tobacco Substitutes – Region-Wise Segmentation (Value-Wise: FY 2015 and FY 2016) and Import of Tobacco and Manufactured Tobacco Substitutes – Region-Wise Segmentation (Value-Wise: FY 2015 and FY 2016)

Slide 17 – Export of Tobacco and Manufactured Tobacco Substitutes – Product-Wise Segmentation (Value-Wise: FY 2015 and FY 2016) and Import of Tobacco and Manufactured Tobacco Substitutes – Product-Wise Segmentation (Value-Wise: FY 2015 and FY 2016)

 Slide 18 – EXIM HS Code Description

Market Influencers

Slide 19: Market Drivers

Slide 20: Market Challenges

Slide 21: Challenges- Industry Issues Regarding Taxation

Competitive Landscape

Slide 22: List of Major Players

Slide 23-42: Profiles of Major Players

Recent Developments

Slide 43: Key Recent Developments

Appendix

Slide 44: Research Methodology

 

 

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