Tobacco exports to cross Rs 13,000 cr this year

New Delhi: The country's tobacco exports are likely to register an over 8 per cent growth and cross Rs 13,000 crore this year, a senior government official said on Wednesday.

Additional Secretary in the Department of Commerce Rajesh Agrawal also said the Tobacco Board has taken a number of steps to help farmers increase their income.

India is the second largest producer of tobacco in the world after China. It is also the fourth largest producer of Flue-Cured Virginia (FCV) tobacco in the world after China, Brazil and Zimbabwe.

"India is the second largest exporter of unmanufactured tobacco (quantity terms) after Brazil. Tobacco exports contribute sizable foreign exchange to the Indian exchequer. This year, we are going to cross Rs 13,000 crore...Tobacco farmers income has also doubled over the last 5 years," Agrawal told reporters here.

During 2023-24, the outbound shipments were Rs 12,005.89 crore (USD 1.5 billion).

The Tobacco Board, under the department, has undertaken several strategic activities to ensure the sustainability and growth of the tobacco industry.

These include crop planning and regulation of production to meet both domestic and export demands.

The board supports 80,000-85,000 registered farmers by providing handholding assistance to produce tobacco of requisite quality to meet the standards of importing countries.

He added that to ensure better price discovery and secure remunerative prices for farmers, the Tobacco Board has implemented an IT-enabled electronic auctioning system for FCV tobacco, the main ingredient of cigarettes.

There are 26 auction platforms in Andhra Pradesh (16) and Karnataka (10), which are the two major tobacco-producing states in the country. Andhra Pradesh tobacco contains higher levels of nicotine than Karnataka's.

Last year, India produced 300 million kg of tobacco. The government regulates the production and aims to maintain the level of production at around 270 million kg.

The additional secretary said India does not promote an increase in production as it is signatory to the WHO Framework Convention on Tobacco Control (WHO FCTC).

In the last 10 years, the government has not registered farmers for the production.

"Flue Cured Virginia (FCV) tobacco farmers' earnings have more than doubled between 2019-20 and 2023-24 from Rs 124 per kg in 2019-20 to Rs 279.54 in 2023-24," he said.

The Tobacco Board was established on January 1, 1976, by an Act of Parliament for the overall development of the tobacco industry.

The board's primary role is to ensure the smooth functioning of the farming system, fair and remunerative prices for tobacco farmers and the promotion of exports.

Financial assistance is extended to farmers through banks, along with the necessary inputs for the production of quality tobacco. It also engages in extension and developmental activities to promote sustainable tobacco cultivation practices.