Bidis and illegal tobacco add up to an unusual challenge in India

India’s largely undeveloped e-cigarette market has growth potential, but tobacco remains cheap and highly competitive, with a significant black market.

A new Indian report by ECigIntelligence shows that the price of manufactured tobacco cigarettes is much lower than in other countries and that they are cheaper than e-cigarettes.

The price differential is even greater when e-cigs are compared with bidis, the cigarettes hand-made from tobacco wrapped in special leaves, which at just an eighth of the price of a regular cigarette are preferred by a majority of Indian smokers.

Nearly 90% of tobacco sales in India is attributed to smokeless tobacco, bidis or illegal cigarettes.

National authorities have banned some smokeless tobacco products and implemented restrictive regulations, such as increasing the cigarette tax. But the government seems not to trust e-cigarettes as a smoking cessation aid.

Four Indian states – Haryana, Karnataka, Kerala and Punjab, together representing about 25% of the national population – have banned the use of e-cigarettes. Nevertheless, there is potential for the market to grow in big cities with no restrictive regulations, the ECigIntelligence report suggests.

What This Means: India’s unusual pattern of tobacco use presents an exceptional challenge both to the government and to any companies wishing to exploit the potential for growth in a largely undeveloped e-cigarette market.

But the presence of a large black market is a complicating factor that is likely to remain for a long time.

– David Palacios ECigIntelligence contributing writer

Photo: MM

Barnaby Page

Editorial director

Before joining ECigIntelligence in early 2014 as one of its first employees, Barnaby had a 30-year career as a reporter and editor for newspapers, magazines and online services, working in Canada, the US and the Middle East as well as his current British location. He has edited publications covering fields including technology and the advertising industry, and was launch editor of the first large daily online news service in the British regional media. Barnaby also writes on classical music and film for a number of publications. Barnaby manages the editorial and reporting teams and works closely with the analyst teams, to ensure that all content meets high standards of quality and relevance. He also writes for the site occasionally, mostly on science-related issues, and is a member of the Association of British Science Writers.