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Tobacco stocks burn as excise hike hits margins, fuels illicit trade risks
Mint Bangalore
|February 12, 2026
A recent excise duty hike on cigarettes has rattled tobacco stocks, with investors bracing for margin pressure, potential volume erosion and a possible surge in illicit trade, even as underlying demand remains sticky.
An additional excise duty on cigarettes and tobacco products, on top of the 40% GST, took effect on 1 February.
(PT)
An additional excise duty on cigarettes and other tobacco products, over and above the highest 40% goods and services tax (GST) rate, took effect on 1 February. As a result, cigarette prices have increased by ₹22-25 per pack of lO sticks.
Shares of ITC Ltd, the country’s largest cigarette maker, have fallen 21% since the excise duty hike was announced on 31 December 2025, while Godfrey Phillips India Ltd is down 22% since the announcement.
This story is from the February 12, 2026 edition of Mint Bangalore.
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