Tobacco industry is one of the oldest industry in the country. Tobacco in India was introduced by the Portuguese in the 17th century. India has a very dominant and aggressive stand in the global tobacco industry. India is the third-largest tobacco producer in the world, with annual production of about 800 million kgs in the last fiscal year.
Raw tobacco and tobacco based products generate about the US$ 3.1 billion( Rs 20,000 Crore) in revenues by way of excise duty, and around US$ 768.69million (Rs. 5,000 crore) by way of foreign exchange every year to the national exchequer.
Though there are large number of varieties of tobacco grown in India the Flue-cured tobacco, Country tobacco, rustica, bidi, chewing tobacco and barley are considered very important because these are the varities through which major Tobacoo products such as cigarettes, bidis, chewing pan masala and different types of mouth fresheners are manufactured.
Major Facts of Tobacco Industry
· The Flu-cured tobacco also known as the FCV tobacco is the main variety of the tobacco that is grown in the India and more than 60% of it is exported while the rest is used for the domestic cigarette production.
· The Indian tobacco is exported to more than 90 countries.
· Export of tobacco products from India stood at 7,910 tonnes, which is valued at US$ 64.09million, during April-June 2017.
· During the period, export of Flue Cured Virginia (FCV) tobacco stood at 33,559 tonnes valued at US$ 121.82 million, while unmanufactured tobacco exports stood at 42,382 tonnes valued at US$ 141.05 million.
The Tobacco industry in the India provides employment to more than 60 lakh people directly and indirectly and contributes very high to the nation GDP
INTRODUCTION: ITC CIGARETEES
The ITC limited is an Indian conglomerate which is headquartered in Kolkata and is one of the oldest and largest conglomerate in India. The company was established in the year 1910 by the name of the Imperial Tobacco Company of India Limited, over the course of time and after the independence it changed its name to Indian Tobacco Company Limited in 1970 to and later it changed it to I.T.C. Limited in 1974. The company is over 118 year old as of now and employs over 25,000 people in more than 62 locations all over the India. ITC limited is the part of the famous Forbes 2000 list.
Earlier ITC was limited to the Tobacco based products mainly cigarettes it began to diversify its portfolio into non-tobacco businesses. Now ITC is into Tobacco Based Products ,Fast Moving Consumer Goods (FMCG), Paperboards & Specialty Papers, Agri-Business, Information Technology, Hotels and Packaging businesses. ITC realized the sustainability of Tobacco based products and began to diversify its business for the future endeavors. Though the major chunk of the revenue of ITC comes from the Tobacco based products but its FMCG sector is also growing at very fast pace and giving tough competition to Unilever and P&G. ITC hotels are also performing very well in the hospitality industry and has hotels such as Grand Chola, ITC Maurya, ITC Kakatiya under its name
The ITC is the largest player in the Indian cigarette industry and it accounts of more than 72% of cigarettes market share and has more than 15 cigarettes brand under its portfolio. Insignia, India Kings, Classic, Gold Flake, American Club, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal are it main premium brands.
BRANDS UNDER ITCThe Tobacco industry in India is one of the largest industry as tobacco is one of the important commercial crop. The tobacco industry in India is over 1 Lakh crore and brings a huge amount of revenue through the exercise duties. The market of Indian tobacco isAs you can see from the above distribution chart the Bidis consists of the highest share with 43% as it is used by the people who are in low income group and the market of Bidis is mainly targeted towards rural areas and sub-urban areas.
· The chewing Tobacco mainly consists of Pan masala and it is also very common in India between the low and high income group
· Cigarettes is one of the important products of Tobacco industry and contributes a major share in the excise revenue and in bringing of foreign exchequer. Cigarettes are the ones which bear the burnt of Taxation in India
– Below is the tax collection from the cigarettes
Now as you can see that out of the total tax collection of around 40,000 core in the fiscal year 2016-17,the tax collection amount is 28,489 crore which is around the 70% of the whole are from the cigarettes only.
The FCV variety of the Indian
tobacco continues to dominate the Indian tobacco exports and as you can see
that the total exports till the month of October is around 1,50,000 lakh crore.
FCV is the major contributor to the national exchequer. Though the exports has
declined over the last fiscal year due to GST and demonetization but it is
expected to pick up the pace again in the next fiscal year.