Tobacco board

News Excerpt: 

The Tobacco Board has authorized a crop size of 100 million kg for Karnataka during the year 2024-25.

Authorization and Allocation:

  • The Tobacco Board has permitted tobacco cultivation on 1.70 lakh hectares of land specifically allocated to registered tobacco growers. 
    • This allocation emphasizes the importance of regulated cultivation practices to ensure sustainability and market stability.
  • Registered tobacco growers are allowed to cultivate at a rate of 1,806 kg per simplex barn. 
    • This specific yield regulation ensures that growers maintain consistent and manageable production levels, preventing overproduction and market saturation while maximizing efficiency in tobacco cultivation.

Tobacco Board:

  • It was established in 1976 under the Tobacco board act 1975.
  • The Tobacco Board of India is a statutory organization established under the Ministry of Commerce and Industry, Government of India.
  • The board regulates the production and marketing of Virginia tobacco and strives to enhance the competitiveness of Indian tobacco in domestic and international markets.
  • It implements various schemes and initiatives for the welfare of tobacco growers, including the Interest Equalization Scheme, the Duty Drawback Scheme, and the Tobacco Growers Welfare Scheme.

Encouragement of Crop Diversification:

  • To reduce the risks brought on by market swings, the regional manager advises growers to plant other crops in addition to tobacco.
    • Farmers may reduce their reliance on a single product by diversifying their crops, which will protect their revenue and make their farming operations more resilient to erratic market conditions.
      • Example: Farmers in black soils of Andhra Pradesh, traditional soils of Gujarat and bidi areas of Karnataka have successfully replaced tobacco with alternative crops. 
  • Encouraging growers to engage in crop diversification not only addresses short-term market uncertainties but also promotes the long-term sustainability of farming practices. 
    • By cultivating a variety of crops, farmers can improve soil health, reduce pest and disease pressure, and enhance ecosystem resilience, contributing to the overall sustainability and viability of agricultural landscapes.


In 2022, the government of India approved the extension of the Interest Equalization Scheme (IES) till 2024. The rates for IES have been revised as 3% for MSMEs (tobacco products have MSME registration) and 2% for manufacturers and merchant exporters.

Duty Drawback Scheme:nThe goal of the scheme is to cut the duty and tax chargeable on imported products that will be used to manufacture exported goods from India. Under this scheme, unmanufactured tobacco, cigars, cheroots, cigarettes, manufactured tobacco, products containing tobacco, reconstituted tobacco, nicotine, tobacco substitutes, etc. will receive a 0.15% drawback rate.

Tobacco Growers Welfare Scheme: The scheme is aimed at the welfare of the flue-cured Virginia (FCV) tobacco growers and their dependent families. A Tobacco Board’s Growers’ Welfare Fund has been approved by the Ministry of Commerce and Industry of India under this scheme. 

Other efforts taken by government in promotion of Tobacco crop:

  • Government support and institutional assistance are primarily directed towards cash crops such as rubber, coffee, tea, and tobacco in India.
  • Subsidies and promotional activities for tobacco are predominantly focused on flue-cured Virginia (FCV) tobacco, with limited support for non-FCV varieties.
  • FCV tobacco receives direct subsidies in the form of cash discounts, along with government support in facilities, regulated production, marketing, technical research, dissemination of information, and export promotion.



India has a prominent place in the production of tobacco in the world. During 2021, India stands as 2nd largest country in production after China and 4th largest exporter of unmanufactured tobacco in the world.

Production and Cultivation: The country accounts for around 10% of the total area under tobacco cultivation worldwide.

  • Various types of tobacco are produced in India, including flue-cured Virginia, country tobacco, burley, bidi, rustica, hookah, and chewing tobacco.

Major Production States: Gujarat, Andhra Pradesh, and Uttar Pradesh are the leading tobacco manufacturing states in India, contributing around 45%, 20%, and 15% of the country's total production, respectively.

NOTE: Flue Cured Virginia (FCV) tobacco is the main commercial crop grown in the Southern transitional zone of Karnataka.


  • Indian tobacco is exported to over 115 countries worldwide.
  • Major export destinations include Belgium, the Philippines, Egypt, Arab Republic, Germany, Nepal, the USA, Turkey, among others.
  • Major importers include Singapore, the USA, the Netherlands, and Germany.

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