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Aug 01, 2017 03:52 PM IST | Source: Moneycontrol.com

Indian tobacco industry to be hit as USFDA proposes to slash nicotine content in cigarettes

India is the second biggest consumer and third largest producer of tobacco in the world

Indian tobaco companies may feel the heat
Indian tobaco companies may feel the heat
 
 
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Indian tobacco market could feel the heat of US drug regulator’s latest proposal to cut the level of nicotine in cigarettes.

US Food and Drug Administration (USFDA) will be seeking public feedback on its bid to slash nicotine content in cigarettes. If the regulation goes ahead in the US and if WHO finds merit in the new law, the global health body could make it a part of the Framework Convention on Tobacco Control (FCTC), stated a report in Bloomberg Quint.

India is one of the 180 signatories to the FCTC.

Indian health ministry has already reiterated its commitment to implement FCTC fully in the country as it drains billions of dollars from the economy.

Also Read: GST: Tobacco products to attract up to 290% cess, pan masala at 135%

The impact of the news resulted in the biggest crash in share prices of American tobacco companies like Altria Group Inc. and British American Tobacco Plc since the recession of 2008.

The Indian tobacco giants like ITC Ltd., VST Industries Ltd. and Godfrey Phillips India Ltd. also saw a fall in the share prices.

Quoting Sanjay Manyal, equity research analyst at ICICI Securities Ltd., the reports said that if implemented the new regulation could be a deterrent for new smokers. However, a policy like this take time to be implemented and the real impact could only be assessed after it kicks in, he added.

However, a policy like this takes time to be implemented and the real impact could only be assessed after it kicks in, he added.

Currently, Indian cigarette industry is worth USD 11 billion. The country is the second biggest consumer and third largest producer of tobacco in the world.
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