India is set to witness a major rise in the prices of tobacco products after Parliament passed the Central Excise (Amendment) Bill, 2025, with the Rajya Sabha approving and returning it to the Lok Sabha. The Bill marks one of the biggest tax hikes on tobacco in recent years and aims to discourage consumption while strengthening public health measures.
The amendment updates the Central Excise Act, 1944, specifically targeting tobacco and nicotine‑based products. The government has revised excise duties across a wide range of items, including cigarettes, cigars, hookah tobacco, chewing tobacco, zarda, scented tobacco, and smoking mixtures. According to official details, the earlier excise duty on cigarettes ranged from ₹200 to ₹735 per 1,000 sticks, but under the new Bill, the duty will now fall between ₹2,700 and ₹11,000 per 1,000 cigarettes, a massive increase intended to curb usage.
The Bill also brings steep hikes for other tobacco products. The excise duty on chewing tobacco will rise from 25% to 100%, effectively doubling the tax burden. Hookah tobacco will see an increase from 25% to 40%, while smoking mixtures for pipes and cigarettes will face one of the highest jumps, from 60% to 325%, as outlined in the updated tariff schedule. These changes reflect the government’s push to align India’s tobacco taxation with global health standards.
Finance Minister Nirmala Sitharaman clarified that the revised duties are not a cess, meaning the revenue will be shared with states as per Finance Commission rules. She also assured that the move will not negatively impact tobacco farmers or beedi workers, noting that several schemes, including crop diversification programs, are in place to support them during the transition.
The government has emphasized that the primary goal of the Bill is to protect citizens from the harmful effects of tobacco and reduce consumption across the country. Public health experts have long argued that higher taxation is one of the most effective tools to discourage tobacco use, especially among young people.
With the Bill now approved, tobacco products across India are expected to become significantly more expensive in the coming months. The move marks a major step in India’s ongoing efforts to strengthen public health policy and reduce tobacco‑related diseases.
