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  • The Industry in Specific

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    Devansh Shah
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    The cigarette industry in India is one of the oldest industries and is highly labor intensive, providing livelihoods to about 5 million people directly and indirectly. It is an oligopolistic market dominated by four large manufacturing companies. The Indian cigarette market is very sensitive to price changes. Following an excise duty reduction and subsequent price drop in 1994, demand for micro cigarettes under 60mm greatly increased, but demand declined again following excise duty increases in later years, leading some smokers to switch to bidis instead of cigarettes. Prices of different cigarette types and sizes depend on excise duty levels set in the central government's annual budget, with more than moderate duty increases affecting prices significantly.

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    The cigarette industry in India is one of the oldest industries and is highly labor intensive, providing livelihoods to about 5 million people directly and indirectly. It is an oligopolistic market dominated by four large manufacturing companies. The Indian cigarette market is very sensitive to price changes. Following an excise duty reduction and subsequent price drop in 1994, demand for micro cigarettes under 60mm greatly increased, but demand declined again following excise duty increases in later years, leading some smokers to switch to bidis instead of cigarettes. Prices of different cigarette types and sizes depend on excise duty levels set in the central government's annual budget, with more than moderate duty increases affecting prices significantly.

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    3 views1 page

    The Industry in Specific

    Uploaded by

    Devansh Shah
    The cigarette industry in India is one of the oldest industries and is highly labor intensive, providing livelihoods to about 5 million people directly and indirectly. It is an oligopolistic market dominated by four large manufacturing companies. The Indian cigarette market is very sensitive to price changes. Following an excise duty reduction and subsequent price drop in 1994, demand for micro cigarettes under 60mm greatly increased, but demand declined again following excise duty increases in later years, leading some smokers to switch to bidis instead of cigarettes. Prices of different cigarette types and sizes depend on excise duty levels set in the central government's annual budget, with more than moderate duty increases affecting prices significantly.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
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    THE INDUSTRY IN SPECIFIC

    :
    The cigarette industry is one of the oldest industries in India. It is an i m p o r t a n t a g r o b a s e d industry. It is highly labor intensive & provides livelihood to about 5 million people directly andindirectly. Cigarette is an item falling under the First Schedule to the Industries (Development &Regulation) Act, 1951 and requires an industrial license.The cigarette market is oligopolistic, with four large manufacturing companies. The Indian marketfor cigarettes and other tobacco products is highly price sensitive. Following the reduction ine x c i s e d u t y a n d c o n s e q u e n t l y p r i c e s i n 1 9 9 4 , t h e r e w a s a n e x p l o s i o n i n d e m a n d f o r m i c r o s (cigarettes shorter than 60 mm). Trade sources estimated that consumption of micros ros e from300 million pieces in 1993 to around 4 000 million pieces in 1994, 18 000 million pieces in 1995and over 19 000 million in 1996. However, with the increased excise duty on these cigarettes sincethe 1996/97 budget, demand has declined, and led to a drift back towards small filter products bysome smokers and towards bidis by others.Prices of different types and size of cigarettes depend inter alia on the level of and changes in e x c i s e duty imposed by the central government in its annual f i s c a l b u d g e t . A n y m o r e t h a n moderate increase in excise duty (say over 3 percent) effectiv

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